Raising stakeholder engagement
Engaging with citizens enables governments to serve them more effectively and solve some of the most difficult challenges that the governments and their citizens face in the twenty-first century. It is not only citizens who need to be heard and consulted. Governments must also engage with businesses in the private sector and with the third sector, including NGOs and community groups. In doing so, governments gain a better understanding of the aspirations and needs of these groups so that they serve their interests in the best way possible.
Fortunately, technology means that it is increasingly possible to engage with a broad range of stakeholders. Through new technologies such as social media, governments can share opinions and information, promote discussion and build relationships in ways that are more effective, active and targeted than ever before.
Some governments are using technology to facilitate e-participation (as the United Nations terms it), enabling citizens to engage with and influence policymaking. At the same time, governments are engaging with business, opening a dialogue about the extent and shape of regulation, and involving NGOs and the third sector in the delivery of services.
Innovative citizen engagement
Over the last decade or so, governments have looked more closely at how to engage effectively with citizens, not least as a way of evaluating their policies and the quality of their services. Initiatives range from using the latest mobile technologies as a gateway to services to harnessing social media and developing new participatory approaches and engagement tools such as surveys and focus groups.
There are a number of ways in which citizens interact with governments – for example, as consumers of government information, such as advice on public health and safety; as customers of government services; as participants in government decision making; and as partners in the design and delivery of policies and services.
Some governments have established specific dedicated institutions tasked with improving government-citizen relations. In Spain, for example, the Office of the People’s Defender dates back to Spain’s most recent constitution, enacted after a referendum in 1978. This ombudsman is elected by parliament for a five-year term to defend the fundamental rights and public liberties of all citizens, with the authority to investigate the activities of ministers, administrative authorities and civil servants.
Civil society organizations may play a useful role connecting governments with citizens, whether by helping raise awareness of state initiatives or holding governments to their word. Favourable taxation regimes – including charitable status provision and tax benefits to promote individual and corporate philanthropy – are also helpful.
If governments hope to enable rapid, efficient and cost-effective engagement between governments and citizens, they must improve access to the Internet and mobile communications. South Korea is a good example of how investment in ICT infrastructure can improve citizen engagement. South Korea topped the UN’s 2012 e-participation index, which compares levels of openness, engagement with policymakers and whether citizens can directly influence decisions.104 The UN report pinpointed the importance of cross-sector mobile applications as providing a gateway to services in South Korea.
The benefits of engaging
Engaging with citizens offers several benefits. It provides governments with the opportunity to create policies that truly reflect the needs of citizens. While citizens may not necessarily have a great interest in traditional politics, they tend to have strong views on those government choices that affect their everyday lives. Involving citizens in the design of those policies likely to have a direct impact on their communities should lead to policies, and thereby facilities, that are most appropriate to their needs, whether those are policies designed to help with the provision of childcare, or new transport infrastructure, schools and hospitals.
A survey of OECD governments listed citizen involvement (71 per cent of respondents), service quality (60 per cent), value for money (55 per cent) and building trust in government (48 per cent) as the main reasons for partnering with citizens in service delivery.105
The Expert Patients Programme (EPP) by the NHS in the UK is an example of where effective citizen involvement increases the service quality and reduces its cost. The EPP is a self-management programme for people who are living with a chronic (long-term) condition. Many GPs who care for people with chronic conditions say that their patients understand the condition better than they do. This is not surprising, as many patients become experts as they learn to cope with their conditions. As part of the EPP, citizens with a chronic condition are provided with free tailored courses to help them take the lead in managing their condition. This helps to improve their health and quality of life, and reduces their incapacity (lack of strength or ability). There are also several courses for parents and guardians of children with chronic conditions, who can then take an active role in supporting their children rather than fully relying on public services.
Collaborating with citizens and enlisting their views is a way of generating fresh ideas that may contribute to public service innovation, both in terms of service delivery and efficiency, for example. The result, hopefully, is better public services.
Citizen engagement also creates a sense of confidence in people, showing that their views really do matter, and that government can be held to account. This may be particularly important for citizens who feel under-represented in formal political institutions.
That confidence is also likely to engender trust. In becoming more closely engaged with citizens, governments have to be more transparent about the way that they operate – which tends to build trust. Engagement through non-government channels, via forms of social media, for example, may make government messages more credible. More widespread agreement, or broader acceptance of change, may also lead to higher rates of compliance with new decisions at a lower overall cost. The result can be greater governmental efficiency and a reduced financial burden for citizens.
Transformation at work: governments that engage
One of the most innovative and widely replicated strategies for effective citizen engagement predates the rise of the Internet. Participatory Budgeting was developed in Porto Alegre, Brazil, in 1989. The initiative allowed neighbourhoods to decide how their government funds should be spent through a series of public meetings.
More recently, many governments have launched policies and established institutions to strengthen connections with their citizens. In Germany, for example, Cologne’s municipal authority launched a participatory budgeting project in 2007. The objective was to canvass opinion for inspiring cost-effective suggestions on how to improve the city’s roads and paths, green spaces and sports facilities.
The scheme was publicized through local radio, billboards and mailshots. The vast majority of participants accessed the scheme via a web forum, although proposals could also be submitted by post, phone or email. Anonymous participation was allowed and all ideas submitted were visible and open to moderated comments. Participants voted for their favourite suggestions, and the top hundred (of almost 5,000 proposals) were assessed by the city council. The best proposals were funded to the tune of €17 million (around US$25 million) and the project won several awards, prompting the council to extend the scheme.
Many authorities regard the Internet as central to their efforts to foster more effective public engagement. Today, government websites come complete with feedback buttons and Twitter accounts.
Under the Obama administration, the US has experimented with a range of national online engagement tools. The website www.change.gov included features such as ‘Your Seat at the Table’, which let citizens view and discuss what suggestions were being made by various organizations and lobbyists to the Obama team. ‘Citizens Briefing Book’ was an early attempt to crowdsource policy ideas. It attracted around 125,000 people, submitting 44,000 ideas and 1.4 million votes. There were some issues, such as ‘early submission’ bias – popular ideas that came in on the first day remained visible and therefore attracted more votes on subsequent days.
Transformation at work: reaching out in Singapore
In 2006, Singapore set up its REACH government agency, dedicated to connecting and engaging with citizens.106 The agency is directed by a supervisory panel of seven members of parliament and eighteen private individuals (some representing grass-roots community groups), supported by the work of youth ambassadors and policy study workgroups.
REACH has three main aims: gauging the public’s opinion to find out what really matters to Singaporeans; reaching out and engaging citizens; and promoting active citizenry. The agency is mandated to solicit and receive feedback from the public, raise the level of public engagement, and provide Singaporeans with forums to offer views, understand policies, and participate in national debates.
Citizens do not have to be part of a specific programme to provide feedback. There are opportunities for feedback through traditional channels, such as dialogue sessions and public forums. Citizens also use online channels, such as e-consultation and e-polls on selected topics. A People’s Forum provides an extensive pool of Singaporeans and permanent residents that REACH can approach to gather views on national policies and issues (generally via online channels).
There are also targeted initiatives. The Junior REACH Ambassador’s programme recruited over 140 youngsters across 24 schools to solicit views from their peers and report back to government.
Each year, REACH publishes a document providing an overview of REACH’s performance and engagement over the year, highlighting issues that were most important for Singapore’s citizens.107
Almost all of the annual feedback inputs come via new media and social media, although face-to-face engagement has been scaled up. The most popular discussion topics for Singaporeans were foreigners, transport, population and immigration.
Proactive dialogue with business
The range of stakeholders governments now must connect with is, of course, much wider than their citizens. Governments have always maintained a dialogue with business. They have solicited the views of business in order to help create a thriving and prosperous economy. They have also sought ways to improve their engagement with the private sector, often in an attempt to solve complex challenges and to reduce the costs of providing public services and infrastructure. The last fifteen years have seen a steady increase in public-private partnerships, for example.
The global financial crisis spurred on many governments to explore fresh ways of engaging with business. Leveraging business activity not only sustains economic growth and competitiveness, but can also promote more effective public governance. Businesses and the corporate sector – acknowledging the importance of effective governance as an enabler of social and economic progress – recognize that they have an inherent stake in pushing for effective rules and regulations. In a world where corporations have considerable wealth and power, business is a principal stakeholder in the development of new forms of institutional architecture, from policy development to information exchange, regulation, financing and service provision.
Diagram 7. The operating model of REACH, Singapore (2014)
There are several measures governments can take to make engagement with business as productive as possible. They can appoint ‘champions’ who promote private sector dialogue and identify barriers to collaboration. Government and business champions should be facilitators and motivators, with know-how, expertise and experiential learning, and positioned at the centre of these processes – governments and CEOs generally share the same concerns and priorities.
A common complaint from companies is that, despite wanting to engage with government, communication is difficult in practice. Companies cite various factors, whether those are bureaucracy, jargon, slow decision making or wasting their valuable time and resources, as contributing to their deep sense of frustration. A survey by the Forum of Private Business, for example, showed that eight out of ten businesses in the UK spent more time dealing with legislation than the year before, and 67 per cent spent more money on engaging specialist consultants to help them remain compliant.
Governments are making an effort to make things simpler and less bureaucratic for business. Online one-stop shops enable new businesses to register and apply for multiple licences at once, improving ease of access and exit, for example. Governments have moved to simplify regulatory frameworks, which are often complex and obscure. The main objectives of simplified regulation are minimizing barriers to entry, lowering costs to enhance productivity and efficiency, making available information sharing to ensure compliance, and promoting law enforcement so as to enhance cross-border trade opportunities. Eastern Europe and Central Asia, along with East Asia and the Pacific, had the highest share of business reforms in the last few years, while economies such as Colombia and Sierra Leone have regulatory reform committees with private sector involvement to improve the business environment.108
For governments to work effectively with business to bring about more sustainable and efficient services for citizens, they need to develop a good understanding of the business sector. Many governments have set up dedicated research institutions, with direct bridges to businesses and universities that provide funding and industry insights, trends and data, and that shape policy and facilitate decision making. For example, the Government Institute for Economic Research in Finland is mandated to analyse public finances and evaluate economic reforms.
A shift from globalization to localization also increases the need for governments and companies to proactively and regularly engage with each other. Businesses are more likely to have a deeper knowledge of local and regional economies than governments, particularly regarding issues that relate to the employment and skills needed to sustain a talented workforce or attract foreign direct investment. All stakeholders should seek to create effective platforms for both dialogue and collaboration.
Business benefits
Poor governmental engagement with business can have a negative impact on firms. In a survey by McKinsey on government business interaction, for example, 47 per cent of executives interviewed reported that new laws and policies had a negative effect on their business.109 Conversely, maintaining positive dialogue brings benefits.
Involving businesses in the design of new policies and regulations can substantially improve decision making in governments, for example. It can ensure that cost-benefit analyses fully recognize the impact of prospective legislation on firms across their full range of activities.
Governments can provide opportunities for businesses to align corporate social responsibility initiatives with public governance approaches, to communicate more effectively, provide thought leadership and address core issues.
Business associations, joint government business councils, forums and working groups have emerged as effective platforms to improve government dialogue with business and align it with stakeholder needs. Just as businesses have implemented strategies and promoted cross-industry collaboration under the umbrella of Corporate Social Responsibility (CSR) initiatives to tackle social and environmental challenges, governments are increasingly aware of how collaboration with businesses can help manage complexity and globalization.
There are performance benefits too. Privately run operations are usually held to be more innovative and efficient than their public sector counterparts. As a result, governments are tapping into the private sector for capital, technology, expertise and financing. Public-Private Partnerships (PPPs) enable governments to deliver public products and services more efficiently, and share risks (demand and revenue, design, implementation, financial and political) with the private sector, based on who can manage those risks best. The benefits associated with PPPs, if applied under the right framework, enable governments to meet their societal obligations while reducing their deficit and laying the foundations for economic development.
PPPs are increasingly being used in the provision of water, telecommunications, transportation and healthcare, with the success of these collaborations relying on competitive and transparent procurement processes. It enables more effective engagement among public-private stakeholders, and can provide a positive impetus for the regional business environment by eliminating monopolization, mispricing and cost overruns, and freeing up government resources for other priority areas, making resource allocation more efficient.110
It also allows for a rapid delivery of service and, depending on the type of contract, could allow for life-cycle costing, making the cost of operation and maintenance more efficient, as it is built in from the start.
To ensure efficiency and the successful delivery of services, governments have demonstrated that private sector commitment can be optimized by introducing legislative frameworks that favour quick and transparent decision making, develop solid PPP frameworks and support economic policies that mitigate private sector risks. This gives governments the ability to harmonize policies and objectives, and creates a consensus where government intersects with business, ensuring that public and private sector activities are complementary.
In engaging with the private sector through PPP, however, governments must be sure to deploy civil servants with the necessary commercial expertise to oversee negotiation of contracts, and extract the appropriate value. Otherwise, governments may end up with long-term contractual arrangements that are unnecessarily disadvantageous for them.
Governments are also using technology to assist entrepreneurial value creation. Government to Business (G2B) portals offer a single access point available 24/7 for activities such as registration, tax and income declaration, and enable them to build business-centric relationships that generate value-added and personalized services. They offer access to information, laws and regulation, assisting businesses more efficiently and eliminating red tape.
Engaging effectively with business can also improve the innovation capacity of government, which in turn can lead to better delivery of public services. By collaborating with innovative organizations, governments enjoy spillover effects, are able to share best practices, access and implement new ideas, and adapt their innovation mechanisms accordingly.
NESTA is an organization in the UK that is involved in a number of activities that back innovation. One survey it conducted revealed that those local authorities in the UK that interacted with the private sector through partnerships or consultation obtained, on average, an 80 per cent increase in service efficiency, quality, access to services and customer feedback.111
Transformation at work: engaged businesses
Governments have implemented innovative solutions for streamlining online G2B services by reducing red tape, facilitating business-related activities and minimizing the complexities associated with multi-agency involvement.
Singapore’s Online Business Licensing Service (OBLS) was launched following feedback from the business community in Singapore to the government’s Pro-Enterprise Panel held in 2000.112 The feedback highlighted issues relating to costs, application processes and requirements of various licences that acted as a barrier to business registration and activity. The OBLS system was a great success, with costs and processing time for businesses significantly reduced. The online one-stop application system enabled applicants to submit one application for multiple licences, and data entry for government was reduced by 60 per cent. Awarded the UN Public Service Award, the system became the model for most G2B portals, demonstrating the importance of products, process and participation for the streamlining of government and business engagement.
Government initiatives that encourage open innovation and free access to public data are key to establishing policies that promote IT solutions, and improve service delivery and innovative business activities. In emerging countries, particularly, IT-enabled practices such as open data and open innovation help overcome problems with weak intellectual-property, copyright and patenting laws. Businesses and other institutions are able to experiment with various practices and relay their findings to governments, who can then make reforms based on business needs and experiences.
In Europe, the Open Cities project partnered the European Union with technology-driven businesses to develop platforms for open innovation in six major European cities, including Barcelona, Amsterdam and Helsinki.113 Local councils became real-life experimentation grounds for companies, providing open-data sources for private and commercial usage of public data for companies.
In an effort to promote entrepreneurial activity, some governments have launched initiatives aimed at increasing the level of SME participation in government procurement. For example, the UK Cabinet Office set up the Innovation Launch Pad, an online tool that enabled small businesses to pitch ideas about how they could carry out the business of government more cheaply and efficiently.114
The UK government’s Cabinet Office also funded a Public Service Launchpad, which was launched in September 2013 and ran until April 2014. The initiative was an intensive fourteen-week accelerator and incubator that aimed to take in people with ideas about how to improve public services, and then help those with the best ideas turn them into successful projects, and then into businesses.115
Another mechanism for SME engagement can be to rank the best-performing SMEs. This provides governments with valuable data and information relating to high-growth sectors, effective corporate governance, and access to capital and partnerships, among other indicators. For example, the Saudi Fast Growth 100 was launched in 2008 by the SAGIA private sector initiative, with the aim of identifying Saudi Arabia’s fastest-growing companies and start-ups. This enabled Saudi Arabia to recognize the contribution of businesses that were creating jobs and spurring innovation, and adapt their national planning strategy accordingly.
In 2010, the Dubai SME100, a similar initiative ranking the hundred best-performing SMEs, was launched by the Dubai Economic Development Board. By participating in the ranking, businesses gain privileged access to government programmes, and benefit from enhanced networking with strategic stakeholders such as banks and financial institutions that are partnering on the initiative, as well as having international market exposure.
The third way
While many countries have engaged with the private sector in an effort to deliver more efficient public services, a considerable amount of government business is still in the hands of the public sector. The US, for example, which has pioneered private sector involvement, both in partnership with government and through the privatization of public sector activities, still owns a lot of its infrastructure, such as railways, ports and water systems. It also makes less use of for-profit schools than Sweden, for instance.
Driven in part by the desire to reduce costs, especially in the aftermath of the recent financial crisis, some governments are considering alternative arrangements for service provision, harnessing the expertise of NGOs, community groups, citizens and public servants.
For example, governments are revisiting the concept of Alternative Service Delivery (ASD), developed in Canada in the 1990s. They are viewing NGOs, community groups and citizens as another form of private service provider. But cooperation with community groups is only a small part of the story. ASD’s main thrust is creating the right structures for service provision. This may involve reorganization within the government, purchase of services, privatizations or partnerships, with the NGOs becoming part of a wider ecosystem of organizations providing public services.
There are several issues policymakers should consider if they are planning on working with NGOs and other non-profits to deliver government services. To begin with, NGOs, non-profits and individual social entrepreneurs may not have the capacity to provide services to the standards required by government. Consequently, it might be more cost-effective to build capacity within the civil service. As with any type of procurement process, due diligence will need to be done and the appropriate governance exercised in terms of granting service contracts and determining the nature of partnerships.
Monitoring not-for-profit service delivery performance can be problematic. Suitable governance of operations is essential, including monitoring. Appropriate metrics will need to be devised to ensure services are being provided to a requisite standard, and to tie performance to reward for payment purposes.
There may be issues relating to the ideological underpinning of the service provider, if the state and the NGO are driven by different philosophies, for example – such as a secular state working with a faith-based service provider. Obtaining clarity up front about what views prevail in the event of disagreement is essential, as is ongoing transparency.
NGOs and community groups can, where they have the capacity and are competent, provide services at lower costs than is otherwise possible. They often draw on voluntary labour and benefit from charitable donations that can be applied towards some public good which would otherwise require tax funding.
Often non-profits offer substantial expertise and local knowledge, and have better relationships with the community than government officials. Cooperation can also help create stronger social bonds within communities. Unlike traditional governmental bureaucracies, NGOs can provide greater flexibility and innovation with the service delivery process than might otherwise be available.
Several countries have made use of co-production of services with the third sector in some areas of public policy. The concept has been applied in varying degrees to many UK government programmes, such as welfare services, public housing and services for young people, for example. In the US, policy initiatives in healthcare, education, prisoner rehabilitation and poverty reduction have co-production aspects to them.
Indeed, most governments have been involved in the co-provision of services with the voluntary sector to some extent. Alternative Service Delivery has been adopted in various forms by Canada (at federal, provincial and city levels), the UK, the US, Australia, New Zealand, Sweden and Latvia, among others.
In poorer countries, state schooling and healthcare systems are frequently supplemented by the activity of NGOs, often externally funded NGOs. Even in countries with highly developed state structures and economies, the specific division of service provision between NGOs and government, as well as the private sector, often arises from historical accident as much as from conscious policy.
More recent initiatives to embrace Alternative Service Delivery include the White House Office of Faith-Based and Neighborhood Partnerships, distributing several billion dollars per year to community and religious organizations that serve the US public.116
It is also interesting that some governments are engaging civil servants in Alternative Service Delivery. They are providing them with the means of forming their own mutual organizations so they can bid for the right to provide government health, education, welfare and even emergency services. In the UK, for example, hundreds of new businesses have been spun out from the public sector and are delivering nearly £1.5 billion of public services. Mutuals – organizations that have left the public sector but continue delivering public services – now employ more than 35,000 people and have generated over 3,000 additional jobs in the last three years alone in the UK.117
All of this confirms that the future will require that governments are genuinely and dynamically engaged with a variety of stakeholders.
In a nutshell: raising stakeholder engagement
It is increasingly important for governments to listen to their stakeholders, their citizens and businesses, in order to better sense their shifting needs and build effective response capabilities. Governments with strong feedback mechanisms will be better able to synthesize valuable insights and feed them into their regulatory and policy frameworks.
As a result, the onus is on governments to engage with digitally savvy citizens through modern, innovative and engaging tools, and to create opportunities for people to participate in the design and delivery of policy and services which will provide higher satisfaction for citizens and lower costs for government.
Governments should also partner with the private sector. First, by doing more to create an enabling environment for private sector development; second, by seeking new forms of engagement with the private sector to leverage its resources for delivering public goods and to support the government’s development priorities.
In addition, government should collaborate with the non-government sector, and civil servants should seek to identify and activate better ways of delivering services or programmes, while maintaining or exceeding appropriate standards, and ensuring that the communities that are closest to an issue are directly involved in addressing it.