Agency Autonomy and Organizational Interaction

The research presented here analyses how managers in central government agencies describe organizational interaction within the public sphere and across the public–private divide. Central government agencies are permanent, public organizations that are formally separated from their parent department, staffed by civil servants, financed mainly via the national government budget, and subject to legal procedures (Pollitt et al., 2004). Central government agencies contribute to the ‘pipe drains’ or ‘silos’ that characterize many contemporary national executives. The degree of specialization is high in this type of organizations, but their status can vary in terms of formal role and de facto autonomy (Yesilkagit & Van Thiel, 2008).

The aim of this research is to study the relationship between formal and organizational safeguards for agency autonomy on the one hand, and observed variation in how organizational interaction is described, on the other. In theory, organizational interaction can be more or less costly for the interacting parties, and cost is thus a determinant of interaction. For example, when performance management regimes make it necessary for an organization to concentrate on its own goals to be perceived as performing well, interacting with others will constitute a cost (Lægreid & Rykkja, 2015a; Molenveld et al., 2019, 2021). The theoretical frame of this research focuses on autonomy as a factor of potential importance for the perceived costs associated with organizational interaction. An assumption is that attitudes towards interaction are in part based on cost–benefit analyses. What these calculations look like, and what to expect in terms of attitudes or behavior, is a debated issue. The results from this research will be interpreted from within two competing perspectives. The first argues that there is a negative relationship between government agencies’ autonomy and their propensity to interact with others (cf. Wilson, 1989). This argument is supported by Bjurstrøm Hagen’s (2021) study of Norwegian government agencies, where a main conclusion is that the higher the policy autonomy of an agency, the less an agency coordinates with others. From within the second perspective, autonomous agencies can identify possible gains from interacting. This gives them a nuanced outlook on interacting with others, which in turn makes the outcome less evident (cf. Busuioc, 2016; Heims, 2019). In line with this latter perspective, the research presented here finds that strong formal and organizational safeguards of agency autonomy are likely to produce positive effects on organizational interaction.

The research design is comparative, including two Nordic countries, Norway and Sweden. Norway and Sweden both feature government agencies, but differ when it comes to vertical control and fragmentation of respective national executive. The Norwegian national executive is less fragmented than the Swedish one, the latter features a strong tradition of administrative dualism and prohibits ministerial rule. Importantly, the formal status of central government agencies differs between the two countries, with a stronger constitutional protection of the Swedish agencies’ autonomy (Balle-Hansen et al. 2012).

The data source used is the Coordinating for Cohesion in the Public Sector of the Future (COCOPS) Executive Survey on Public Sector Reform in Europe (Hammerschmid, 2015). The present study uses a sub-sample of this survey. This sub-sample represents only managers in central governmental agencies (and hence does not include respondents working in ministries), in Norway and Sweden. Compared to earlier studies of top managers’ views, and Nordic managers views on ‘coordination’ (cf. Christensen et al., 2015; Greve et al., 2016; Lægreid & Rykkja, 2015b) the design of this study is different in its empirical scope.

The next section is dedicated to the analytical framework of the study. Research design, methodology and data are then discussed, followed by a presentation of the main results. In the concluding section, these results and possible lessons are discussed.

This section starts with analyses of agency managers’ descriptions of common ways of solving ‘coordination problems’. Table 3 presents the results as calculated means for agency managers in Norway and Sweden, respectively. The most common strategy used is to refer issues to higher levels in the hierarchy. This activity is here interpreted as referring issues within the organization, a measure that is in relative terms not costly. On the latter note, it is interesting that referring issues to political actors and bodies is less common than sending referrals upwards in the internal organizational hierarchy. This result makes sense if the former type of referrals is perceived as exposing the organization to top down coordination. In that case, this finding is in line with earlier research showing that those responsible for organizational interaction prefer not to be coordinated from the top and down (Molenveld et al., 2019). This result also indicates that, even though political decision-makers are commonly in a position to apply holistic views on policy, coordination problems are not always brought to their attention.

It is in relative terms common to set up a work or project group that includes crossing organizational borders. Strategies that entail creating special-purpose bodies or appointing a lead organization are uncommon in both countries. This is expected, given the high costs of such strategies from the agencies’ point of view: these measures are associated with pooling resources and/or handing over autonomy to another organization. In both countries, permanent new bodies are less frequent measures than temporary new structures for interaction. Finally, we find it interesting that consulting with experts or private actors is reported to be relatively uncommon. Consulting entails asking for or exchanging information, and is an uncostly measure according to our theoretical understanding. A possible interpretation of this finding is that government agencies rarely consult with private actors. Here, then, we observe the relevance of an internal/external dimension in our understanding of interaction.

Comparing the results reported in Table 3 across countries, differences are small as managers in both countries give similar descriptions of the relative importance of the measures applied. To set up a temporary crosscutting project is more common in Norway than in Sweden, while crosscutting policy arrangements or programs are more common in Sweden than in Norway. To appoint an organization to lead some type of interaction is less common in Sweden than in Norway. Finally, the habit of consulting experts is less common in Sweden than in Norway.

Country differences surface when regression analyses are used to explain the observed patterns (see Table 4). The regression models include dichotomous variables for ‘country’, and for the control variable ‘managerial position’, respectively. The main result is that the ‘country’ variable produces significant results for most of the analyzed problem-solving strategies.

As the dichotomous ‘country’ variable is coded with Norway = 1 and Sweden = 2, the coefficients reported for this variable (Table 4) represent the effect of ‘being Sweden’. A large positive and statistically significant effect (B = 1.182***) is reported for solving coordination problems by setting up a policy arrangement/program that crosses organizational borders; this result means that this strategy is clearly more common in Sweden than in Norway. Other statistically significant country differences can also be observed, albeit smaller ones: in comparison with agency managers in Norway, fewer Swedish agency managers report that coordination problems are solved by setting up temporary project groups (B = -0.493***), appointing a lead organization (B = -0.442***), or consulting experts (B = -0.546***).

In theoretical terms, it is interesting that many of the potentially costly interaction measures are more common in the Swedish context than in the Norwegian one. Managers in Swedish central government agencies are more likely to report interaction that entails permanent new structures as well as policy arrangement or programs. They are also reporting more referrals to political actors, a measure that could result in vertical coordination and thus autonomy loss. These results contradict the claim that the more agency autonomy, the less interaction. They also lend support for the competing perspective where agencies make nuanced analyses of cost and benefits, not necessarily shying away from advanced collaborative arrangements. The results suggests that it is the strong safeguards of the autonomous mandates of Swedish agencies that lower the risks involved in interacting with others in collaborative ways. The result that appointing lead organizations is more common in Norway than in Sweden is however in line with the idea of a negative relationship between autonomy and interaction, as are the results reported for external consultations.

Turning now to the issue of the quality of interaction, a first observation regarding the results (means) reported in Table 5 is that the respondents in general give highly positive evaluative marks. Regarding collaboration within the national public sector (i.e. internal interaction), managers are most positive in their evaluation of collaboration within their own policy area and less so when it to comes to collaboration between different policy areas. Vertical collaboration between national and sub-national bodies is evaluated in more positive terms by Swedish managers than Norwegian ones. In contrast, vertical collaboration between national and international bodies is given higher scores by managers in Norway than by their Swedish counterparts. Moreover, collaboration with private actors external to the public sector is described in positive terms. This is interesting, since consulting with private stakeholders, as a strategy to solve coordination problems, was described as being rare (as reported above). Thus, interaction with external actors appears to be rare yet perceived as well functioning. For most types of collaborative relationships, Swedish managers are more positive than Norwegian ones.

The regression analyses presented in Table 6 show that the variable ‘country’ has strong and significant effects on the perceived quality of different types of collaboration. For all types of collaboration, except interaction between national and supra-national government bodies, Swedish respondents report a more positive perception than their Norwegian counterparts do. A positive judgement passed on collaboration is a cost–benefit analysis with a positive conclusion. From within this perspective, we conclude that Swedish managers find collaboration to be a more positive thing than their Norwegian colleagues do. On the one hand, this result further strengthens our interest in the suggestion that strong safeguards for agency autonomy lower the risks (costs) for organizational interaction. On the other hand, the respondents are evaluating interaction from within a more general perspective than one that focus on their own organization. It is also possible that the Swedish and Norwegian respondents respectively have different experiences from collaborating, at least when it comes to collaboration between national and supra-national bodies which possibly means something different in the EU member state Sweden than it does in Norway. Finally, the regression analyses presented in Table 6 confirm the importance of controlling for managerial level, as this control variable has independent strong, negative and significant effects on all dependent variables except the perceived quality of collaboration between national and local/regional government bodies. This result means that agency DGs find the quality of collaboration to be higher than managers operating at lower levels do; the same result is found when controlling for country. The largest effects of managerial level are reported for the quality of collaboration between national and supra-national government bodies, and for the quality of collaboration with private stakeholders, respectively.

The aim of this research was to study the relationship between formal and organizational safeguards for agency autonomy on the one hand, and observed variation in how organizational interaction is described, on the other. To this end, Norwegian and Swedish agency managers’ views on organizational interaction are compared.

A first set of empirical analyses concerned what measures that are adopted to meet needs for organizational interaction in central governments. The focus was on types of organizational interaction that vary in terms of how costly they are from the participants’ perspective. The descriptions are in this part relatively similar across both countries and managerial levels, which give them a certain weight. One conclusion from this part of the study is that organizational interaction that involves administrative actors horizontally within the public sphere is more common than interaction that entails transferring the initiative (power) vertically, i.e. to political actors. Setting up project groups, policy arrangements, or programs was common, while appointing another organization to lead an interactive arrangement – a high cost measure – was rare. Moreover, inviting coordination ‘from above’ was also rare. This means that political actors only to a limited extent are called upon to enable organizational interaction or solve coordination problems. This finding confirms earlier research showing that coordination measures that are controlled from the top down are not appreciated by those with the task of implementing them (Molenveld et al., 2019, 9f). Consulting with private stakeholders was reported as being uncommon, even though consultation is an uncostly measure. In sum, the respondents describe limited interaction across internal and external organizational borders. This is perhaps not surprising. The literature on integrated policy strategies describes failed policies rather than stories of success, and identifies a large number of constraining factors, such as poor design, sectoral priorities, lack of resources, and lack of political support (Candel, 2017).

A second set of analyses concerned the quality of interaction, in this part collaboration, between different sets of actors. The managers were in general positive in their evaluations. Collaboration with organizations operating within their own policy field was perceived as being of the highest quality, in comparison with all other types of collaboration. Interestingly, a high rating was also given to collaboration with private stakeholders. Hence, although this type of external interaction was described as rare, it was perceived as being of high quality. Collaboration across policy fields and vertically with public actors on the local and supra-national levels received relatively low ratings.

A third set of analyses had an explanatory focus. In theoretical terms, the most interesting result from this part of the study is that country had a significant effect on the type of measures that were applied, as well as on perceptions of quality. The two countries in this study represent different levels of agency autonomy, as Swedish central government agencies have stronger constitutional safeguards for their autonomy country than the Norwegian ones. The Swedish national executive is described as highly fragmentized due to its model of executive dualism and lack of ministerial rule. The regression analyses reveal that being a Swedish agency manager increases the propensity to report interaction, including crosscutting policy arrangements or programs and permanent engagements. A significant positive effect was also observed as Swedish respondents more frequently described referrals to political actors, a measure that could result in vertical coordination and thus autonomy loss. These results contradict the claim that the more agency autonomy, the less interaction (cf. Bjurstrøm Hagen, 2021; Wilson, 1989). There is however support for the competing perspective where autonomous agencies make nuanced analyses of cost and benefits, not necessarily shying away from advanced collaborative arrangements (Busuioc, 2016; Heims, 2019). It is possible that the unusually strong safeguards of the autonomous mandates of Swedish agencies affect the cost–benefit analyses of interacting with others in a positive way. In more general terms, the more stable the organizational boundaries are, the lower the risk of losing control over turf or mandate for those who engage in interaction with others. The indications of a positive relationship between strong safeguards of agency autonomy and organizational interaction rest on a structured country comparison, a different empirical strategy than the earlier contributions that are referenced here. The relevance of the results should thus be investigated further, preferably using more extensive data that allows more advanced statistical modelling.