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Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at https://about.jstor.org/terms and Oxford University Press are collaborating with JSTOR to digitize, preserve and extend access to Journal of Public Administration Research and Theory: J-PART This content downloaded from 128.6.45.205 on Wed, 25 Aug 2021 18:58:13 UTC All use subject to https://about.jstor.org/terms JPART 21:i301-i319 PUBLICNESS AND ORGANIZATIONAL PERFORMANCE: A SPECIAL ISSUE Dimensions of Publicness and Organizational Performance: A Review of the Evidence Rhys Andrews*, George A Boyne*, Richard M. Walker* *Cardiff Business School; fCity University of Hong Kong ABSTRACT Debates about the merits of publicness have dominated the public administration landscape since the foundation of the modern state. The extent of organizational publicness (ownership, funding, and controlyf K D V Z D [ H G D Q G Z D Q H G L Q G H Y H O R S H G F R X Q W U L H V L t rose following the postwar settlement and fell under the policies of New Right government and the popularity of the notions of New Public Management. We argue that publicness effects are likely to diminish in the face of organizational and contextual characteristics and that what matters for performance is management and organization. To this end, we examine the evidence base by undertaking a review of academic studies of publicness and organizational performance. The results suggest that publicness makes a difference to efficiency and equity, but the magnitude and direction of this effect varies with the characteristics of the empirical studies. Our findings clearly point toward the need for research that includes all dimensions of publicness, a variety of performance measures, and the moderating effects of management, organization, and external constraints. Publicness has long been a central topic in public administration (Bozeman 1987; Rainey 1979; Rainey, Backoff, and Levine 1976yf ' L I I H U H Q W Y L H Z V R Q W K H U R O H R I W K H V W D W H D Q d the market in providing services to citizens have spurred enduring debates about the various elements of publicness: that is ownership (public, private, or nonprofityf I X Q G L Q g (government grants versus consumer paymentsyf D Q G F R Q W U R O E \ S R O L W L F D O R U P D U N H W I R U F H V \f (Bozeman 1987yf 6 L Q F H W K H U L V H R I W K H 1 H Z 5 L J K W L Q W K H V D Q G W K H D G Y H Q W R I 1 H Z 3 X E O L c Management in the 1980s, "privateness," that is, marketization and reduced regulation, have held sway as tools for delivering better outcomes. These developments ran counter to nearly four decades of public-sector growth after the Second World War. However, when in the autumn of 2008 the world's globalized financial markets imploded as the price of unrestrained liberalism became apparent, the state in Western democracies reasserted its role, taking the very bastions of capitalism-the banks-into public ownership. To un derstand the merits of alternative models of ownership, funding, and control, it is necessary to consider their consequences. To that end, we seek to unravel the relationship between Address correspondence to the author at [email protected]. We are grateful to the reviewers for their valuable insights that have led to improvements to this article, doi: 10.1093/jopart/mur026 The Author 2011. Published by Oxford University Press on behalf of the Journal of Public Administration Research and Theory, Inc. All rights reserved. For permissions, please e-mail: [email protected] This content downloaded from 128.6.45.205 on Wed, 25 Aug 2021 18:58:13 UTC All use subject to https://about.jstor.org/terms 302 Journal of Public Administration Research and Theory dimensions of publicness and the performance of public services by examining the extant literature. Although variations in organizational publicness often reflect global economic devel opments, they are typically underpinned by arguments about their impact on aspects of performance such as efficiency and effectiveness (Haque 2001yf + R Z H Y H U V X F K F O D L P s often amount to little more than ideological assertions based on the preferences of pro tagonists. Empirical evidence is therefore required to better understand the effects of ownership, funding, and political control on the performance of public services. In this article, we undertake a review of academic studies of publicness and organizational per formance. To do so, we focus on studies that compare the impact of variations in publicness within single industries during the same time period. We exclude empirical evidence on the before and after effects of changes in publicness as several published reviews of pri vatization and contracting have already covered this material (e.g., Boyne 1998; Hodge 2000; Leland and Smirnova 2009yf . We first outline theoretical perspectives on publicness and performance (including discussions of the joint effects of publicness and performance and likely moderating variablesyf D Q G U H V H D U F K G H V L J Q V I R U W H V W L Q J W K H V H W K H R U L H V 7 K H H P S L U L F D O H Y L G H Q F H L V W K H n reviewed before conclusions are drawn and an agenda for further research laid out. We find that publicness effects, and particularly those associated with ownership (the most studied dimensionyf G L P L Q L V K Z K H Q G L I I H U H Q F H V L Q P D Q D J H P H Q W R U J D Q L ] D W L R Q D Q G H [ W H U Q D O F R n straints are taken into account. However, the majority of studies we review are under specified, and to date, few researchers have included all dimensions of publicness or tested for the effects of intervening variables. THEORETICAL PERSPECTIVES ON PUBLICNESS AND PERFORMANCE The conventional distinction drawn between public and private organizations is their form of ownership (Rainey, Backoff, and Levine 1976yf : K H U H D V S U L Y D W H I L U P V D U H R Z Q H d by individual and institutional shareholders, public agencies are "owned" collectively by political communities (usually democratically elected municipalities or national govern mentsyf , Q D G G L W L R Q W Z R I X U W K H U S X E O L F S U L Y D W H G L I I H U H Q F H V D U H R I W H Q R E V H U Y H G ) L U V W S X E O L c agencies are funded largely by taxation rather than fees paid directly by customers. In many cases, their money comes "en bloc" from political sponsors rather than in discrete sums in exchange for each good or service that is supplied. Second, public organizations are controlled largely by political forces, not market forces. In other words, their behavior is constrained by political demands and regulations rather than customer demands and com petitive pressures (Dahl and Lindblom 1953yf . Bozeman (1987yf K D V F R P E L Q H G R Z Q H U V K L S I X Q G L Q J D Q G F R Q W U R O L Q W R D G L P H Q V L R Q D O " model of publicness. The model is dimensional in the sense that all three variables should be viewed as continuous rather than categorical. For example, in 2008, banks in many countries were brought into public ownership (partially or fullyyf W K U R X J K J R Y H U Q P H Q W D l purchase. Similarly, both public and private organizations receive varying percentages of their funding from government and fee-paying customers. For example, public-sector landlords are usually funded partly from rents paid by tenants and partly through govern ment subsidies, whereas private firms in the arms industry obtain most of their income from government contracts that are in turn funded by tax revenue. All organizations too, whether public or private, are subject to some governmental regulation-though the extent of This content downloaded from 128.6.45.205 on Wed, 25 Aug 2021 18:58:13 UTC All use subject to https://about.jstor.org/terms Andrews et al. Dimensions of Publicness and Organizational Performance 303 this varies by industry and sector. Thus, organizations can be more or less public on each of the three dimensions. This raises the question of which aspect of publicness is most im portant for organizational performance, and whether each one has separate or interactive effects. Furthermore, publicness is widely thought to make a difference to internal orga nizational variables such as goals, structures, and managerial values (Boyne 2002yf $ U H W K e performance effects of ownership, funding, and control contingent on such organizational characteristics? In this section of the article, we first consider the separate effects of each of the three criteria of publicness. We next explore whether they are likely to influence perfor mance in combination and then proceed to consider whether their effects may be moderated by organizational variables. We conclude this section with a discussion of appropriate research designs to test publicness-performance hypotheses. Ownership This is the simplest model of the relationship between publicness and performance and implies that public or private ownership per se has consequences for organizational achievements (see figure 1yf , I W K L V P R G H O L V Y D O L G W K H Q D V W U D L J K W V Z L W F K E H W Z H H Q P R G H s of ownership (or a shift in the public/private balanceyf V K R X O G O H D G W R R E V H U Y D E O H G L I I H U H Q F H s in performance. Theoretical arguments underpinning this expectation (and some of those for funding and controlyf D U H O D U J H O \ G H U L Y H G I U R P S X E O L F F K R L F H V F K R O D U V K L S Z K L F K L V F U L t ical of the effects of publicness. We present these arguments because of their longevity, though note that this perspective is challenged (see Bozeman 2007yf D Q G W K D W W K H H Y L G H Q F e on the impact of privatization and contracting is weak (Boyne 1998; Hodge 2000; Leland and Smirnova 2009yf . The two arguments are, first, the economic theory of property rights suggests that public ownership leads to lower efficiency (Clarkson 1972; Demsetz 1967yf , Q S U L Y D W H R U J D Q L ] a tions, owners and shareholders have a direct financial incentive to monitor and control the behavior of managers. Similarly, managers of private firms themselves are likely to benefit from better performance either because company shares are part of their remuneration package or because their salary is linked directly to financial success. By contrast, property rights in the public sector are vague and diffuse. Individual voters have little to gain from expending effort on monitoring managerial behavior. Moreover, public managers do not usually obtain direct financial benefits from higher organizational performance. A second theoretical argument is that ownership is associated with inherent differ ences in management practices (Boyne, Jenkins, and Poole 1999yf , Q S D U W L F X O D U S U L Y D W e organizations are widely believed, rightly or wrongly, to have management styles that Figure 1 Models of Publicness and Performance: The Conventional Model The Conventional Model OWNERSHIP PERFORMANCE This content downloaded from 128.6.45.205 on Wed, 25 Aug 2021 18:58:13 UTC All use subject to https://about.jstor.org/terms 304 Journal of Public Administration Research and Theory are more innovative, productive, and "cutting edge." Successive waves of management fads, for example, benchmarking and total quality management, have originated in the private sector and then been imported into public organizations (Box 1999yf ) L U P V L n the private sector may be more likely to seek out and emulate the practices of their more successful rivals, in part because of the competitive pressures they face. The adoption of such practices by less successful firms is in turn often associated with higher legitimacy and better substantive performance (Heugens and Lander 2009yf ( Y H Q L I W K H D U J X P H Q W W K D t private management practices are different and better is valid, this does not imply that they can (or shouldyf E H D S S O L H G L Q S X E O L F R U J D Q L ] D W L R Q V $ O O L V R Q \f. Funding The potential significance of this dimension of publicness is highlighted by public choice theories of bureaucracy. According to Niskanen (1971yf R U J D Q L ] D W L R Q V W K D W R E W D L Q W K H L r revenues from a political sponsor are inherently unresponsive to the people who receive their services. Effectiveness and consumer satisfaction are likely to be lower as funding moves toward block grants rather than individual payments by service consumers. Public organizations are also likely to be inefficient because of the information asymmetries between politicians and bureaucrats. Only the latter are likely to know the "true" cost of supplying a service and can exaggerate the funding required to meet their political spon sor's demands for a specified quantity and quality of outputs. Indeed, Niskanen (1971yf argues that power in the budgetary process is tipped so far toward the bureaucracy that public organizations will be only half as efficient as private firms. Bureaucratic power may have been reduced by reforms that have strengthened the ability of politicians to monitor public agencies (e.g., performance measurementyf , Q D G G L W L R Q I R U P V R I S U L Y D W L ] a tion that confer market power on funders (e.g., contracting outyf D Q G F R Q V X P H U V H J , through a combination of vouchers and choice between rival suppliersyf V K R X O G V L J Q L I L F D Q W O y enhance economic efficiency. The consequences for dimensions of performance such as effectiveness and equity are, however, less clear. Control Political control is likely to mean that organizations have priorities set for them, that these priorities change with a new ruling party (or a new government ministeryf D Q G W K D W W K e fulfillment of political expectations is monitored and managerial behavior is regulated (Nutt and Backoff 1993yf ) R U P V R I S R O L W L F D O F R Q W U R O L Q W K H S X E O L F V H F W R U L Q F O X G H D X G L W L n spection, performance reports, the submission of plans, and limits on budgetary autonomy. The regulation of public organizations becomes easier (if more expensiveyf D V P R U H D Q d more of these mechanisms are added to the armory of political principals (Ashworth, Boyne, and Walker 2002yf 1 H Y H U W K H O H V V V X F K F R Q W U R O V P D \ K D Y H D G Y H U V H F R Q V H T X H Q F H s for performance if public organizations are subject to the demands of multiple principals who impose conflicting demands on them. In this case, it may be impossible to achieve objectives that require contradictory strategies and organizational arrangements. Further more, the burden of meeting accountability requirements and dealing with regulatory agen cies may undermine the efficiency and effectiveness of organizations that deliver services. On the other hand, political control might be required to enhance the equity of public serv ices, so the net impact of this aspect of publicness may depend on the relative weight at tached to different dimensions of performance. This content downloaded from 128.6.45.205 on Wed, 25 Aug 2021 18:58:13 UTC All use subject to https://about.jstor.org/terms Andrews et al. Dimensions of Publicness and Organizational Performance 305 Figure 2 Models of Publicness and Performance: Dimensions of Publicness Dimensions of Publicness OWNERSHIP FUNDING PERFORMANCE CONTROL To the extent that public organizations are disproportionately subject to political con trol rather than market control, they lose the performance benefits of competitive pressures. Control by market forces is assumed to bring higher efficiency, consumer responsiveness, and effectiveness in the private sector. This, of course, assumes that private organizations operate in a more competitive environment, which has not been tested systematically (Boyne 2002yf $ F R P S U H K H Q V L Y H H [ D P L Q D W L R Q R I W K L V S U R S R V L W L R Q Z R X O G U H T X L U H Q R W R Q O y direct competition for market share to be taken into account but also other forms of rivalry in the public sector such as benchmark competition (especially in an era of widespread performance league tablesyf D Q G F R P S H W L W L R Q I R U E X G J H W V K D U H V . Interactive Effects of Ownership, Funding, and Control on Performance The discussion so far has assumed that each aspect of publicness has a separate effect on performance (see figure 2yf + R Z H Y H U L W V H H P V S O D X V L E O H W K D W W K H L P S D F W R I R Z Q H U V K L p and funding may be contingent on the extent of political control. Indeed, Bozeman (1987, 17, italic in originalyf D U J X H V W K D W S R O L W L F D O F R Q W U R O L V W K H H V V H Q F H R I S X E O L F Q H V V D O O R U J D n izations are public because political authority affects some of the behavior and processes of all organizations .... Public pertains to the effects of political authority." This implies that public ownership and funding may have only weak effects on performance in the absence of strong political control. Public organizations that pursue the narrow objectives of senior bureaucrats rather than those of politicians and citizens are "out of control" and unlikely to perform efficiently, equitably, or effectively. Similarly, the impact of private ownership and funding on performance may be wiped out by tight government regulation of organizational strategy, processes, and products. This suggests that political control not only has a separate effect on performance but also moderates the effects of the other two dimensions of publicness (see figure 3yf 2 Z Q H U V K L S D Q G I X Q G L Q J P D \ L Q W X U Q , have both a direct and an indirect impact or, in the "strong" version of this model, influence performance only through political control. Organizational Characteristics as Moderators of the Link between Publicness and Performance Many studies in recent years have shown that public service performance is influenced by organizational variables such as structures, processes, and strategies (Ashworth, Boyne, and Entwistle 2010yf , W V H H P V O L N H O \ W K H U H I R U H W K D W W K H L P S D F W R I S X E O L F Q H V V R Q S H U I R U P D Q F e is at least partly contingent on such organizational characteristics (see figure 4yf , Q S D U W L c ular, the effects of ownership, funding, and control may be moderated by the characteristics This content downloaded from 128.6.45.205 on Wed, 25 Aug 2021 18:58:13 UTC All use subject to https://about.jstor.org/terms Journal of Public Administration Research and Theory Figure 3 Models of Publicness and Performance: Ownership and Funding Partly Moderated by Political Control Ownership and Funding Partly Moderated by Political Control OWNERSHIP FUNDING CONTROL PERFORMANCE Note: - = moderated relationship that have been found to vary between public and private organizations. Empirical studies of sectoral differences (largely using ownership as the sole publicness criterionyf K D Y H I R X Q d that public organizations are more bureaucratic and that public managers are less materi alistic and have weaker organizational commitment than their private-sector counterparts (Boyne 2002yf 7 K H U H O D W L R Q V K L S E H W Z H H Q S X E O L F Q H V V D Q G S H U I R U P D Q F H P D \ E H H V S H F L D O O y strong in organizations that display these characteristics. Similarly, publicness may have only weak effects in organizations that have flexible rather than bureaucratic structures, and managers who place a high value on monetary rewards and identify closely with the agency in which they work. Research Designs for Studying Publicness and Performance The arguments set out above suggest that links between ownership per se and performance may be weak, that the effects of the dimensions of publicness are interactive rather than separate, and that publicness effects are moderated by organizational and managerial var iables. This raises a number of research design issues (also see Rainey 2010yf % R ] H P D Q D Q d Loveless (1987, 198yf G U D Z L Q J X S R Q W K H V F K R O D U V K L S R I 0 H \ H U D Q G : L O O L D P V \f, note that "... the admonition to be concerned about proper specification of models is a useful reminder that comparison of public and private organizations is fraught with complexity." Figure 4 Models of Publicness and Performance: Dimensions of Publicness Moderated by Organizational Characteristics Dimensions of Publicness Moderated by Organizational Characteristics OWNERSHIP FUNDING CONTROL ORGANIZATIONAL CHARACTERISTICS _ PERFORMANCE Note: : moderated relationship This content downloaded from 128.6.45.205 on Wed, 25 Aug 2021 18:58:13 UTC All use subject to https://about.jstor.org/terms Andrews et al. Dimensions of Publicness and Organizational Performance 307 Meyer and Williams' argument is that many public-private differences will disappear if models are correctly specified. Bozeman and Loveless argue that knowledge on organiza tions is not sufficiently developed to test this proposition. However, recent developments in knowledge on management and organizations, and the availability of better data, suggest that theoretically valid models of publicness and performance might now be specified. Ideally, a public/private research design is required that uses models that have a lag between the independent and dependent variables to ensure that the measures of publicness temporally precede their hypothetical performance effects. Appropriate internal and exter nal controls are also required to take account of possible confounding effects that might arise from management, organization, or the environment. In addition to addressing these central characteristics of causation, longitudinal data permit an examination of the longer term effects of publicness, particularly when studies are seeking to establish the lingering effects of changes in ownership, funding, or control. It also permits an exploration of causal direction-does publicness result in performance outcomes or visa versa? (not least be cause the rationale for a sectoral switch is often "poor performance"yf : K H Q G D W D V H W s are built, they also need to be sufficiently robust to test the many interactions between variables that would be required to tease out the relationships proposed in figure 4. Along side the need to collect clear and accurate measures of publicness and performance, it will also be necessary to have sufficient external constraints in the data sets to capture the vary ing circumstances in which organizations operate and which contribute toward or constrain their performance. Good internal and external measures of management and organizational context may also assist in casting aside some of the spuriousness concerns associated with claims about causality in studies of publicness. Finally, comprehensive analyses of the effects of publicness would need to cover different dimensions of performance, not least because a gain on one dimension (e.g., efficiencyyf P D \ E H R E W D L Q H G E \ V D F U L I L F L Q g another (e.g., equityyf : H Q H [ W F R Q V L G H U Z K H W K H U W K H H Y L G H Q F H R Q S X E O L F Q H V V P H H W V W K H V e methodological criteria and thereby provides a reliable guide to the performance effects of ownership, funding, and control. EVIDENCE ON PUBLICNESS AND PERFORMANCE Table 1 provides a summary of the evidence drawn upon in this article. It lists the unit of analysis, the sample size, whether funding, ownership, or control are included as inde pendent variables in the studies, the dependent variable (efficiency, effectiveness, or eq uityyf W R J H W K H U Z L W K Z K H W K H U W K H V W X G \ L Q F O X G H G F R Q W U R O V D Q G P R G H U D W R U V : H I R F X V R Q W K H V e performance criteria because much of the argument about changes in publicness is pred icated on efficiency savings; effectiveness is concerned with achieving goals, so is central to the study of organizational performance; and equity is often argued to be the major advantage of state rather than private provision of services (Le Grand 1982yf . Articles listed in table 1 were derived from a Web of Science search for studies with the words public, private, and performance (or derivatives thereofyf L Q W K H W L W O H R U D E V W U D F W . The initial search identified 129 articles. Examination of these led to the removal of 98 articles because they were theoretical or reviews of existing evidence, did not include variations in publicness within the research design, drew on inappropriate measures of performance, and did not carry out statistical tests for significant differences or focused on privatization and contracting (as we noted in the introduction, these issues have been previously examined in the extant literatureyf . This content downloaded from 128.6.45.205 on Wed, 25 Aug 2021 18:58:13 UTC All use subject to https://about.jstor.org/terms Table 1 Tests for Publicness and Organizational Performance Study Organizations and Sample Size Dimension of Publicness Dimension of Number Performance of Tests Percentage of Tests NS ~ Internal/ External Controls? Moderators? Alexander and Lee (2006yf Amirkhanyan, Kim, and Lambright (2008yf Andersen and Blegvad (2006yf Backx, Carney, and Gedajlovic (2002yf Barbetta, Turati, and Zago (2007yf Bartel and Harrison (2005yf Bedi and Garg (2000yf 1,907 US community hospitals 14,423 US nursing homes 275 Danish dental care centers 50 international airlines 3,186 Italian hospitals 12,904 international manufacturing firms 1,194 Indonesian schools Ownership Efficiency Ownership Ownership Ownership Funding Ownership Funding Control Ownership Effectiveness 1 Effectiveness 1 Equity 1 Efficiency 8 Effectiveness 14 Efficiency 6 Effectiveness 2 Efficiency 1 Efficiency 6 Effectiveness 1 Ownership Effectiveness Effectiveness 100 100 63 0 37 3 83 0 66 0 40 0 100 0 Both 0 100 0 0 0 100 0 0 17 34 0 100 0 100 60 0 Both Both Both External External External Internal Internal Both 0 100 0 Both 0 100 0 Both 66 0 33 Both Market concentration (+yf and size (-yf I R U S U L Y D W e Market concentration (-yf for private Expenditure (-yf Funding (-yf I R r public and private Funding and control (-yf I R U S X E O L c Continued This content downloaded from 128.6.45.205 on Wed, 25 Aug 2021 18:58:13 UTC All use subject to https://about.jstor.org/terms Table 1 (continuedyf Tests for Publicness and Organizational Performance Study Organizations and Sample Size Dimension of Dimension of Number Publicness Performance of Tests Percentage of Tests Internal/ External NS - Controls? Moderators? Boardman and Vining (1989yf Bojalil et al. (1998yf Bozeman and Bretschneider (1994yf Bozeman and Loveless (1987yf Caves and Christensen (1980yf Chun and Rainey (2005yf Clark, Dorwart, and Epstein (1994yf Cowie and Asenova (1999yf Davies (1971, 1977yf Filippini and Prioni (2003yf _ 489 international manufacturing organizations 99 Mexican general practitioners 733 US research laboratories 50 Austrian, Belgian, and Finnish research and development labs 2 Canadian railroads 25,184 US federal employees 452 US mental health agencies 146 UK bus companies 2 Australian airlines 34 Swiss bus companies Ownership Efficiency Ownership Funding Ownership Ownership Funding Ownership Ownership Ownership Ownership Effectiveness Effectiveness Effectiveness Effectiveness Effectiveness Ownership Efficiency Efficiency Effectiveness Equity Efficiency Efficiency Efficiency 2 4 12 2 2 0 100 0 100 Both 0 100 Both 0 0 33 67 50 50 17 66 0 Internal 0 Internal 17 Internal 33 0 67 0 100 0 Both 50 50 0 75 25 0 17 33 50 0 0 100 0 50 50 Both This content downloaded from 128.6.45.205 on Wed, 25 Aug 2021 18:58:13 UTC All use subject to https://about.jstor.org/terms Table 1 (continuedyf Tests for Publicness and Organizational Performance Study Organizations and Sample Size Dimension of Dimension of Number Publicness Performance of Tests Percentage of Tests NS Internal/ _ External Controls? Moderators? Greenwood, Deephouse, 92 international and Li (2007yf Hausman and Neufeld (1991yf Heinrich and Fournier (2004yf Knapp et al. (1999yf Liu et al. (2006yf Mancebon and Muniz (2008yf Micco, Panizza, and Yanez (2007yf management consulting firms 315 US electric utilities 62/4,149 US substance abuse treatment centers 390 UK mental health care providers 18,294 Chinese health care organizations 293 Spanish high schools 6,677 international banks Ownership Effectiveness Funding Funding Ownership Control Ownership Ownership Ownership Efficiency Effectiveness Effectiveness Effectiveness Effectiveness Ownership Efficiency Effectiveness Efficiency Efficiency Effectiveness 5 18 12 6 84 0 17 23 0 100 Internal 100 0 ll 89 0 Both 75 83 76 50 37 25 Both 0 Both 0 100 50 0 50 22 88 0 External 16 Internal 50 50 Internal National elections (-yf for public GDP growth (+yf for public National elections (-yf for public GDP growth (+yf for public Continued This content downloaded from 128.6.45.205 on Wed, 25 Aug 2021 18:58:13 UTC All use subject to https://about.jstor.org/terms Table 1 (continuedyf Tests for Publicness and Organizational Performance Study Organizations and Sample Size Dimension of Dimension of Number Publicness Performance of Tests Percentage of Tests + NS Internal/ External Controls? Moderators? Mileent (2005yf Oum, Adler, and Yu (2006yf Ramaswamy (2001yf Sarkar, Sarkar, and Bhaumik (1998yf Syhakhang et al. (2001yf Wheeler, Fadel, and D'Aunno (1992yf 287/28,410 French hospitals 116 international airports 110 Indian manufacturing firms 73 Indian banks 575 US substance abuse treatment centers Ownership Ownership Ownership Ownership 105 Laos pharmacies Ownership Ownership Effectiveness Effectiveness Efficiency Effectiveness Efficiency Effectiveness Effectiveness Efficiency Equity 2 3 3 4 20 10 0 0 100 0 100 0 0 66 100 0 30 40 50 50 33 0 30 Both 0 0 100 0 100 0 100 0 0 Internal Both Internal Internal Internal Note: Sample size for individuals and organizations reported for studies using Hierarchical Linear Modelling models. This content downloaded from 128.6.45.205 on Wed, 25 Aug 2021 18:58:13 UTC All use subject to https://about.jstor.org/terms 312 Journal of Public Administration Research and Theory Table 2 Summary of Support Scores for Publicness and Performance Efficiency Effectiveness _Equity_ _ + NS - + NS -~ + NS ~ Ownership 28 (25yf \f 40 (33yf \f 38 (62yf \f 75 (60yf \f 0 (0yf Funding 50 (83yf \f 50 (17yf \f 85 (84yf \f X X X Control X X X 9 (15yf \f 0 (0yf ; ; X Note: Weighted mean support scores are given in parentheses; X denotes no tests of this hypothesis. Before exploring the evidence in the empirical studies in detail, we need to consider how their results should be combined and synthesized. The method that is used here is based on the percentage of statistical tests that support the hypothesis that publicness results in higher organizational performance (see column 5 in table 1yf 7 R F R X Q W D V V X S S R U W I R r the hypothesis, two conditions must be satisfied. First, the result must be in the predicted direction. Second, the result must be statistically significant, that is, greater than would be likely to arise by chance alone (at the .05 significance levelyf , I W K H V H F U L W H U L D D U H D S S O L H d to all the tests in a single study, then a support score can be calculated. This is the number of tests tt t are consistent with the hypothesis that publicness results in higher organiza tional performance as a percentage of all the tests that are reported in the study. The total number of tests conducted ranges from 1 to 84. The final step in this analytical procedure is to construct an aggregate support score across all the studies that have tested the impact of publicness on performance. This can be done in at least two ways (Rosenthal 1991 yf ) L U V W , the support score for each study can be treated equally regardless of whether it contains 1 or 200 tests. This unweighted mean has the advantage that studies that conduct a large number of tests on the same data set are not given undue importance. Second, the support score for each study can be weighted (multipliedyf E \ W K H Q X P E H U R I W H V W V L Q W K D W V W X G \ , n other words, equal weight is attached to each test rather than each study. This weighted mean has the advantage that studies that report only a small number of tests do not have a disproportionate influence on our analysis. The "real" level of support for the publicness-performance hypothesis probably lies somewhere between the unweighted and weighted figures. Although it is impossible to determine precisely where, we suspect that the weighted mean provides a more accurate picture because many of the studies that report only a few tests tend to show positive or negative results. Put simply, the published results may not be a representative sample of all the results that were obtained. Therefore, we emphasize the weighted support score in our evaluation of the evidence. Table 2 presents a three by three matrix containing the weighted and unweighted mean support scores for each for each dimension of publicness and performance. The first thing to note is that most of the studies focus on the effects of ownership on efficiency and effectiveness. Far less research has been undertaken on funding and control, and few studies have considered equity. Second, three of the nine cells in table 2 are empty-no tests have been conducted on the effects of control on efficiency and funding or control on equity. Third, the level of support for any of the hypotheses is typically low and at best mixed. The effects of funding and control on efficiency are almost all insignificant, and the evidence on the impact of ownership on efficiency and effectiveness is evenly spread across positive, negative, and insignificant results. For the tests of the publicness-performance hypothesis This content downloaded from 128.6.45.205 on Wed, 25 Aug 2021 18:58:13 UTC All use subject to https://about.jstor.org/terms Andrews et al. Dimensions of Publicness and Organizational Performance 313 included in our analysis, the only stronger relationships are between public ownership and equity (75yb X Q Z H L J K W H G D Q G \b weightedyf D Q G I X Q G L Q J S X E O L F Q H V V D Q G H I I L F L H Q F y (weighted 71yb \f. Characteristics of the Studies The inclusion of dimensions of publicness varied across our sample of articles, as did the range of performance dimensions. Only two articles included measures of all three dimensions of publicness (Bartel and Harrison 2005; Heinrich and Fournier 2004yf 2 Z Q H r ship figured in every case, bar that of Hausman and Neufeld's (1991yf V W X G \ R I 8 6 H O H F W U L c utilities in the early twentieth century and Chun and Rainey's (2005yf D Q D O \ V L V R I H P S O R \ H H s in the US federal civil service. Six articles included measures of funding-for example, Heinrich and Fournier's (2004yf V W X G \ R I V X E V W D Q F H D E X V H W U H D W P H Q W F H Q W H U V L Q W K H 8 Q L W H d States utilized measures of the percent of funding from Medicare, federal revenues, local government revenues, and patient insurance (private and unable to payyf 7 K H W Z R V W X G L H s that addressed all publicness variables were, therefore, the only ones to address the political control or regulation question. Heinrich and Fournier (2004yf X V H G D P H D V X U H R I D F F U H G i tation of substance abuse service delivery agencies by the state or the Joint Commission on Accreditation of Health Care Organizations; and a study from the field of transportation used trading protection and price-capping to gauge variations in the extent of government regulation of competition in some countries (Bartel and Harrison 2005yf . Effectiveness was the most frequently used dependent variable (21 studiesyf I R O O R Z H d closely by efficiency (17yf Z L W K H T X L W \ E H L Q J X V H G L Q R Q O \ F D V H V 7 K H V H F R Q F H S W V R I S H r formance were operationalized in myriad ways. Studies of trading organizations chiefly operationalized effectiveness though profits (Backx, Carney, and Gedajlovic 2002; Oum, Adler, and Yu 2006yf Z K H U H D V V W X G L H V W K D W H [ D P L Q H G S X E O L F S U R J U D P V G U H Z X S R n service outcomes: abstinence, reduced frequency of drug use, decreased criminal activity (Heinrich and Fournier 2004yf D Q G G H D W K 0 L O F H Q W \f. Measures of efficiency included technical efficiency (Alexander and Lee 2006; Barbetta, Turati, and Zago 2007yf D Q G F R V W s per kilometer or per hour (Filippini and Prioni 2003; Wheeler, Fadel, and D'Aunno 1992yf . A number of studies drew upon throughput measures such as employee productivity (Backx, Carney, and Gedajlovic 2002yf R U L Q S X W V L Q F O X G L Q J F R O O H F W L R Q R I I H H V & O D U N , Dorwart, and Epstein 1994yf ( T X L W \ Z D V W \ S L F D O O \ P H D V X U H G L Q W H U P V R I D F F H V V W R V H U Y L F H s (e.g., Wheeler, Fadel, and D'Aunno 1992yf . The 31 studies we review were typically undertaken in single countries (23yf D O W K R X J h there were several multicountry studies. Of the single country studies, most were conducted in the United States (eightyf Z L W K $ X V W U D O L D 6 Z H G H Q D Q G W K H 8 Q L W H G . L Q J G R P U H S U H V H Q W H G R n two occasions. Other developed countries studied on one occasion were Canada, Denmark, France, Italy, Spain, and Switzerland, whereas six studies were undertaken in developing economies (China [one], India [two], Indonesia [one], Lao [one], and Mexico [one]yf . Ownership, Funding, and Control The summary of results shown in table 1 together with the support scores in table 2 indicates the ambiguities of the research findings on ownership. Our first major point is that this is in direct contrast with the expectations about the effects of ownership on performance. This is particularly so for efficiency and effectiveness with the balance of the evi dence pointing toward nonsignificant findings (42yb D Q G \b weighted support scores, This content downloaded from 128.6.45.205 on Wed, 25 Aug 2021 18:58:13 UTC All use subject to https://about.jstor.org/terms 314 Journal of Public Administration Research and Theory respectivelyyf 7 K H H Y L G H Q F H R Q H T X L W \ S R L Q W V D O L W W O H P R U H W R Z D U G W K H S R V L W L Y H H I I H F W V R f publicness on performance, but with only three studies testing this, it is impossible to draw strong conclusions. Research on primary health care sums up the equivocal nature of the evidence for ownership. Wheeler, Fadel, and D'Aunno (1992yf H [ D P L Q H W K H D V V H V V P H Q W R I R X W S D W L H Q t substance abuse treatment centers in the United States and conclude that private-sector centers are more profitable and efficient than public and not-for-profit providers, but that public-sector centers perform better on access, thereby supporting the notion that private ownership is more efficient and effective, and public ownership more equitable. Amirkhanyan, Kim, and Lambright's (2008yf F R P S D U L V R Q R I P H D V X U H V R I Q X U V L Q J K R P e quality and access across the public, private, and nonprofit sectors indicates that public and nonprofit homes achieve higher quality than their private counterparts. This study also suggests that public nursing homes cater for many more Medicaid recipients. Bojalil et al. (1998yf H [ D P L Q H W K H H I I H F W L Y H Q H V V R I S X E O L F D Q G S U L Y D W H * H Q H U D O 3 U D F W L W L R Q H U V * 3 V \f in Mexico and find that private GPs in rural areas were more likely to make wrong decisions when diagnosing diarrhea and acute respiratory infections among children. Knapp et al. (1999yf L Q Y H V W L J D W H G Z K H W K H U S U L Y D W H D Q G Y R O X Q W D U \ V H F W R U S U R Y L G H U V R I P H Q W D O K H D O W K F D U e in the United Kingdom are more cost effective than their public-sector counterparts. Ef fectiveness of service delivery, as measured by quality of care, is worst in private-for-profit and best in mixed ownership forms. The limited number of studies that examine funding do not allow us to draw even tentative conclusions about this dimension of publicness and performance. Some studies show support for private funding, others that funding makes no difference-the unweighted support score for efficiency is bimodal, whereas the weighted score suggests that public agencies are more efficient. For example, Heimich and Fournier's (2004yf V W X G \ R I V X b stance abuse treatment programs in the United States finds that funding effects are pre sent but very small. Bozeman and Bretschneider (1994yf D Q G & K X Q D Q G 5 D L Q H \ \f, too, find limited support for the relationship between public funding and performance. Although control is arguably the most important measure of publicness, only two studies have turned their attention to this variable. It is, therefore, again possible to draw only ten tative conclusions. In these studies, Bartel and Harrison (2005yf V K R Z W K D W W U D G H S U R W H F W L R n practices lead to worse performance among Indonesian public corporations in manufactur ing industry, whereas Heinrich and Fournier (2004yf I L Q G W K D W W K H H I I H F W V R I D F F U H G L W D W L R n processes on substance abuse treatment programs in the United States are very small. Research Design Samples varied from two to tens of thousands of cases. Nine had fewer than 99 cases, 12 of the studies had samples between 100 and 999 cases, and a further 10 articles used samples more than 1,000, of which 5 were more than 10,000. Looking across all the studies of performance and publicness, we find that the smaller the sample the more likely a positive relationship between publicness and performance would be uncovered. Studies with sam ples of at least 1,000 reported a 17yb Z H L J K W H G V X S S R U W V F R U H I R U S R V L W L Y H U H O D W L R Q V K L S V Z L W h publicness, 61yb Q R Q V L J Q L I L F D Q W D Q G \b negative, whereas the weighted score for those with between 100 and 999 cases was 26yb \b, and 20yb U H V S H F W L Y H O \ 7 K H V H G L I I H U H Q F H s are not large but suggest that smaller samples may give a misleading impression of the impact of publicness. This content downloaded from 128.6.45.205 on Wed, 25 Aug 2021 18:58:13 UTC All use subject to https://about.jstor.org/terms Andrews et al. Dimensions of Publicness and Organizational Performance 315 Longitudinal designs should provide clearer evidence on causality than cross sectional ones that provide only snapshots of the link between publicness and performance. For the studies that we reviewed, 15 were longitudinal and another 16 were cross-sectional. We examined whether the support scores for ownership varied by this aspect of research design, given that most studies explore this aspect of publicness. When we broke down the weighted support scores for the effects of ownership on efficiency, we find that on the whole, there are few marked differences between the findings of longitudinal and cross-sectional studies, with 29yb R I O R Q J L W X G L Q D O W H V W V X Q F R Y H U L Q J S R V L W L Y H V W D W L V W L F D O O \ V L g nificant relationships, 41yb Q R U H O D W L R Q V K L S D Q G \b negative relationships (22yb \b, and 35yb U H V S H F W L Y H O \ I R U F U R V V V H F W L R Q D O W H V W V \f. By contrast, for effectiveness, longitudinal tests revealed 0yb S R V L W L Y H U H O D W L R Q V K L S V \b nonsignificant relationships, and 36yb Q H g ative relationships (29yb \b, and 9yb I R U F U R V V V H F W L R Q D O W H V W V \f for the effects of ownership on effectiveness. This latter finding implies that studies of publicness and performance utilizing a longitudinal research design may be more likely to uncover deteriorations in the effectiveness of publicly owned organizations over time that are masked in cross-sectional comparisons. The most appropriately designed studies of organizational performance will contain both internal and external controls (see Boyne 2003yf : H Q R Z V X P P D U L ] H W K H V X S S R U t scores and again limit our comments to the studies that examine the effects of ownership. Similar to the findings for longitudinal designs, the support scores for the use of controls also indicate that ownership does perhaps matter and that private organizations may be better performers on measures of efficiency and effectiveness. The weighted support score for the studies of ownership including both controls result in low positive associations with performance (9yb \f and higher support for a negative relationship (43yb Z L W K Q R Q V L J Q L I L F D Q t relationships standing at 48yb \f. The weighted support score for higher efficiency in private organizations stands at 67yb W K R X J K W K L V I L Q G L Q J L V I R U R Q O \ W K U H H V W X G L H V \f. The use of exclusively internal or external controls was less likely to influence the results for studies of efficiency, but for effectiveness, the use of internal measures added weight in the favor of higher performance in the private sector (from 14yb W R \byf , I Z H F R Q W U D V W W K H V H I L Q G L Q J s with those studies incorporating no controls, those for effectiveness report a high level of nonsignificant results (69yb \f, with 29yb V X S S R U W I R U D S R V L W L Y H U H O D W L R Q V K L S D Q G R Q O \ \b for a negative one, clearly very different from the more fully specified relationships noted above. Studies of efficiency painted a more balanced picture (33yb S R V L W L Y H \b nonsig nificant, and 39yb Q H J D W L Y H \f, but again, these results are at odds with those that use both internal and external controls. Clearly, research design is important. The use of a more comprehensive production function for organizational performance (at least for this sample of studiesyf W H Q G V W R G U D w out a negative influence of publicness on outcomes. This implies that organizations with a higher degree of publicness appear to perform more poorly when their internal and external circumstances are held constant. It also indicates that simplistic bivariate analyses are likely to provide a misleading impression of any differences between the achievements of public and private organizations. Moderators Only four studies include moderators of the effects of publicness. Market concentration and size are added to the modeling of nursing homes performance in Amirkhanyan, This content downloaded from 128.6.45.205 on Wed, 25 Aug 2021 18:58:13 UTC All use subject to https://about.jstor.org/terms 316 Journal of Public Administration Research and Theory Kim, and Lambright (2008yf H [ S H Q G L W X U H D Q G J R Y H U Q P H Q W I X Q G L Q J W R % D U E H W W D 7 X U D W L D Q d Zago's (2007yf V W X G \ R I , W D O L D Q K R V S L W D O V I X Q G L Q J D Q G F R Q W U R O W R % D U W H O D Q G + D U U L V R Q s (2005yf D Q D O \ V L V R I P D Q X I D F W X U L Q J I L U P V D Q G Q D W L R Q D O H O H F W L R Q V D Q G J U R V V G R P H V W L F S U R G X F t (GDPyf J U R Z W K W R 0 L F F R 3 D Q L ] ] D D Q G < D Q H ] V \f assessment of banks. Two of these studies find that government funding weakened performance among publicly owned organ izations (Bartel and Harrison 2005; Barbetta, Turati, and Zago 2007yf $ P L U N K D Q \ D Q . L P , and Lambright (2008yf X Q F R Y H U H Y L G H Q F H V X J J H V W L Q J W K D W P D U N H W F R Q F H Q W U D W L R Q K D V Y D U \ L Q g effects on alternative dimensions of performance, leading to better effectiveness among privately owned nursing homes, but lower equity. Micco, Panizza, and Yanez (2007yf V X g gest that the electoral cycle has damaging effects on the effectiveness and efficiency of publicly owned banks, especially in the year that national elections are held, whereas GDP growth strengthens performance. Although the evidence is sparse and patchy, there is enough to suggest that moderators make a difference to the apparent effects of publicness and that they should be included in future studies. CONCLUSIONS Debates on the merits of public and private provision have dominated public administration since the foundation of the modern state. Yet, the number of studies that directly compare public and private effects on performance in the same industry and over the same time period is not great. Furthermore, most studies focus only on ownership while neglecting the funding and control dimensions of publicness and examine effects on efficiency and effectiveness without paying much attention to equity. This latter characteristic of the empirical studies is especially surprising because a fairer distribution of resources is a fundamental rationale for state intervention and public service provision. Taken at face value, the existing evidence suggests that publicness makes little dif ference to performance. The strongest patterns in the evidence (albeit derived from only a few studiesyf D U H W K D W S X E O L F R Z Q H U V K L S O H D G V W R P R U H H T X L W \ D Q G W K D W S X E O L F I X Q G L Q J P D y be associated with higher efficiency. However, our evaluation of the impact of various methodological characteristics of the studies implies that such results should be treated cautiously. Publicness effects appear to emerge more strongly in studies with small sam ples, with cross-sectional rather than longitudinal research designs and with few controls for the internal and external features of organizations. In addition, a range of other variables moderates the impact of publicness. Thus, more solid evidence is likely to be produced by research designs that use larger samples; compare public and private performance over time; include controls for managerial, organizational, and environmental variables; and also test such variables for moderating effects. Including all three dimensions of publicness, covering a range of aspects of organi zational performance, and developing and testing propositions on the moderating effect of management, organization and environment will substantially enhance the evidence base. Improvements can be made to the measurement of publicness by including issues of regulation and oversight, technology and contracting to capture subtle variations along the ownership continuum, and the multiple ways in which political control is exercised (audits, plans, inspection, annual reports, financial controls, and performance indicatorsyf . Effort is urgently needed to establish the key variables that moderate the publicness performance relationship, including the ways regulation may influence the effects of ownership and funding. The main management and organizational variables explored This content downloaded from 128.6.45.205 on Wed, 25 Aug 2021 18:58:13 UTC All use subject to https://about.jstor.org/terms Andrews et al. Dimensions of Publicness and Organizational Performance 317 in the publicness literature also need revisiting as possible moderators. These include the environment, goals, structures, and values (Boyne 2002yf ) R U H [ D P S O H U H G W D S H L V W \ S L F D O O y higher in more public organizations, but evidence now suggests that it does not always have a harmful effect on performance (Brewer and Walker 2010yf S H U K D S V E H F D X V H S X E O L F Q H V s moderates this relationship. The consequence of these substantive and methodological problems is that it is impossible to conclude with any confidence that publicness makes a positive or negative difference to organizational performance or to judge which of the three dimensions of publicness is most important and for which aspects of organizational performance. This is hardly a happy state of affairs for a research topic that is so central to the discipline of public administration. 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