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Nodal governance

Nodal governance

This is a short section, concerned with public governance in an expert world. The ideas as they relate to political policy creation are discussed elsewhere. Where all this may evolve is also investigated in depth in the discussion of the scenario, Renewed Foundations

The state as agent.

The public sector spends a large fraction of the GNP in most industrial nations. It regulates most of the industry in direct or indirect ways. The state is intimately concerned with personal finances, education, health and dependency. It is expected to deliver or ensure the delivery of a wide range of services, to keep the environment clean, the streets safe and businessmen honest. It schools the population and conducts fundamental research, it provides cultural leadership and offers a meeting ground for diverse motives, perspectives and priorities. The public has, for the most part, reached the limit of tolerance on taxation and so it does this against a background of constrained resource, and quite unconstrained demands for services, welfare, value for money and predictability.

Figure 1: State expenditure amongst the OECD nations, net of welfare transfers.

The figure shows how state expenditure on operational matters has grown over 120 years. (Welfare represents up to another 30% on top of these sums.) The reasons for growth in this part of the state's activities are straightforward: our societies have become more complex, the infrastructure and human resource which is needed is also more complex, and we abut more upon each other than was once the case. More resource - and much more skill - is needed in order to create and manage all of these new features, as well as to patrol the boundaries between them.

As the state has become an ever-more ambitious and powerful entity, so increasing efforts were spent on improving its tool kit of information and insight. Its actions became increasingly the determinant of profit, and so were studied attentively. Economic and other insight allowed us to define solutions to issues which had previously been problematic. Indeed, without this toolkit, it is arguable that we would be unable to manage the systems which we have now created.

The implication of this is that the state has become more expert and more embroiled in technical issues such as water supply, energy management, economic oversight. Each of these has, in its turn, a ramifying web of stakeholders and interests: water, for example, affects land owners and environmentalists, sports enthusiasts and local government, health officials and farmers. Dozens of focused, often expert interests and arms of the media concern themselves with the doings of this sector. The law which enables these is national, local and increasing transnational; and the pressures which can be imposed are multidimensional and expert. Often, 'swarms' of interest will crystallise around an issue; whilst in other cases, strong interests seek representation on supervisory boards, at shareholders meetings or on local government

Expert arms of government have proliferated. Britain has over ten thousand statutory bodies and the US far more. In addition, however, there are layers of government which are created on a geographical basis, often ranging from the transnational down to the local, in five to six layers. Legal challenges frequently cause - for example - European law to be instantiated in individual nations before their national government has had time to ratify it or seek derogation.

Figure 2: Local government now receives proportionately less state funding.

This is not to say that local government is proportionately resourced, however, as Figure 2 shows. There is a large difference between nations, but the majority cut the proportion of state funding that went to local government between 1990 and 1997. In addition to the greatly increased complexity which the state faces, therefore, most have been cutting on regional subsidiarity which increasing functional delegation. ("Subsidiarity" is the term applied to carrying out government at the most local possible level. It is something to which most OECD governments subscribe in theory, if not in practice. Local taxation and spending is, for example, relatively hard for central banks to control, and the risk of inflation is - in theory - increased.

Expertise, subsidiarity and activism collide.

Networks of expert policy formation may well collide with trends to increasing activism. If this is to be avoided, either something new will have to set the pace of events - as we discuss in the scenario, Pushing the Edge - or else a new approach to inclusion and micro-democracy will have to develop. This serves as the focus for the scenario, Renewed Foundations

Figure 3 notes three pairs of forces which are driving change (arrows.) Expert voices have the potential to generate clean options, but lobby groups and focused interests have the capacity to vitiate these. Activities are overseen as never before, and this oversight is informed by a powerful toolkit of policy variables and understanding of the issue. Rapidly evolving events impinge on any element in a network of this sort because of the connectivity to which it is exposed. However, these connections usually complicates the nature of the response.

Figure 3: Four evolving factors.

At the heart of these issues lie four evolving factors. First, as already described, an activity has to be conducted in the heart of a closely coupled network. This creates the potential for expert policy, but sets requirements if this is to be achieved.

Politics at the national level are addressed elsewhere. However, it is increasingly difficult to offer national-level prescriptions that satisfy all parties and a swarm of activism and issue-specific politics can be expected to develop

In order to offset special interest, shocks, short term views and technical enthusiasms, governance needs to form an overview of what is needed to satisfy enough of the parameters against which it works and to operate within practical resource constraints. It needs to have options which it can present which are thought through, and based on a time frame which is similar to that of the tools which it intends to deploy. If one is working with - for example - education, then the time frame between beginning a policy and seeing results from it must be long. Overall plans must be set within a similar framework, and able to justify themselves in these terms to the contentious. This includes political overlords.

Finally, such strategies do not 'just happen', and neither are they the fruit of abstract study nor elite introspection. They have to be right, but they also have to be seen to be right, and it is often the agreement upon the framework within which these issues are seen which is as important as the answer itself.

We began by discussion water supply. However, who is to say what weight should be put on the relative utility of scenic beauty and health, flood abatement and the cost of and risk to the disruption of supplies of domestic water at peak demand? Such balances are struck in debate, where a framework arises which describes 'what an answer would look like'. Filling in the blanks - finding the specifics of such an answer - is hard work, but essentially mechanical as compared to the first stage.

In the absence of such debate, major stakeholders may fail to recognise the terms in which the solution is cast. An 'expert' committee, considering genetically modified foods, may well suggest that there is limited danger, describing the issues in actuarial and biochemical terms. This will seem like a restatement of the problem to many lay stakeholders, and will force official bodies either to accept or reject the report as a whole. Networks of experts (and concerned groups) need to work out a common language of debate that accurately describes the issues and apportions due weight amongst them. This takes time and effort and the temptation to side-step it is always great.

Process management may need a new cadre of officials (or politicians) whose job it is to ensure that the right people speak together in the right order, for long enough to arrive at a sensible way forward that most can accept. Further, these debates need to be iterative, and driven by the urge to say strategic things, rather than to answer to crisis. This is a major overhead which most have yet to recognise as necessary, let alone something which is firmly in place.

Elsewhere, we have discussed the distinction between the "e"-economy and the "k"-(knowledge) economy. A great deal has been said about how the 'e' aspects of government may develop: better access to information, electronic polling and voting, direct application to one-stop shops for advice and the like. This has been called e-government. What is described here is the grown-up version of this: k-government. How are we to deploy the best possible understanding onto the issues of governance? How are we to do this in due time? How are we to handle issues at the right level? As yet, there are no processes in train which seem likely to deliver the answers to these questions in the larger countries amongst the industrial world. We consider the implications of this elsewhere.

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