Public sector capacity matters, but what is it?

Blog by Rainer Kattel, Marriana Mazzucato, Rosie Collington, Fernando Fernandez-Monge, Iacopo Gronchi, Ruth Puttick: “As governments turn increasingly to public sector innovations, challenges, missions and transformative policy initiatives, the need to understand and develop public sector capacities is ever more important. In IIPP’s project with Bloomberg Philanthropies to develop a Public Sector Capabilities Index, we propose to define public sector capacities through three inter-connected layers: state capacities, organisational capabilities, and dynamic capabilities of the public organisations.

The idea that governments should be able to design and deliver effective policies has existed ever since we had governments. A quick search in Google’s Ngram viewer shows that the use of state capacity in published books has experienced exponential growth since the late 1980s. It is, however, not a coincidence that focus on state and public sector capacities more broadly emerges in the shadow of new public management and neoliberal governance and policy reforms. Rather than understanding governance as a collaborative effort between all sectors, these reforms gave normative preference to business practices. Increasing focus on public sector capacity as a concept should thus be understood as an attempt to rebalance our understanding of how change happens in societies — through cross-sectoral co-creation — and as an effort to build the muscles in public organisations to work together to tackle socio-economic challenges.

We propose to define public sector capacities through three inter-connected layers: state capacities, organizational routines, and dynamic capabilities of the public organisations…(More)”.

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