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Public Owners and Managerial Civil Servants: the Clush of Cultures Within Italian Public Institutions since the Reform of 2000

Essay issued on 9 September 2013

Seminar of Cultural Organization

Master in Cultural Economics and Entrepreneurship

In 2000 the Italian Government introduced a reform in the public institutional system to stop the widespread bribery practices discovered by early 90s investigations (1) into abuses.  Public institutions, which used to be under the direct control of political leaders and relevant parties and clans, were revisioned as modern private enterprises: political leaders could still set the main institutional goals, but projects were to be managed according to independent, accountable, efficient and transparent business practices.
In Chandler(2)'s terms, a political class that used to run public affair as a family business all of a sudden had to share and negotiate its goals with an unexpected managerial class. Since then a clash of cultures(3) has taken place within Italian public institutions with “political owners” and “managerial civil servants” competing more for their own leadership within the institutions rather than for the main public goals of the institutions themselves. Organizations -  this Italian example proves - can thus be complex since their units rely on different procedures and values and can fail to attain an agreed conversation(4) on shared goals.

This essay first summarizes Chandler's main definitions of “ownership” and “manager”. Second, it shows how Chandler's analysis turns helpful to describe the main features of the two professional categories that have risen in the Italian public institutions since 2000. In the end, it shows how the competition between the two sub organizational cultures has absorbed more efforts than the attainment of the main organizational goals.

Tracing the managerial revolution in American business, Chandler identifies two main categories of firms: small family run firms and modern enterprises. Family run firms, which dominated the US economy till 1840, were mainly managed by owners, ie a very restricted number of people employing members of their close social network, addressing a restricted geographical area, and basing their success on market dynamics. Modern enterprises, which have come to be quickly predominant in a little more than a century, are instead managed by a hierarchy of professional managers employing technically skilled workers, addressing a wide market and gaining their direct income from internal organizational standards, normally referring to a level of responsibility.

Since the 2000 reform of the Italian public system, Italian politics have developed as “owners” and civil servants as “managers” of national, regional and local institutions. While public institutions are not private enterprises and so not all Chandler's analysis can be applied, the main pattern does fit perfectly. Politicians normally select themselves within a restricted group of members of the same political party, they compete for the leadership in geographically specified areas, and their success is measured in terms of electoral market appreciations. Civil servants, quite to the contrary, are selected according to their relevant technical skills, belong to a nation wide category and their salary depends mainly on their position within the hierarchy.

What makes Italian politicians and civil servants unique in terms of Chandler's description is that they do co-exist at the same time within the same institution. Political owners have never looked for managerial civil servants in order to make their enterprises more effective and profitable, as American businessmen did. Political owners rather had managerial control imposed on them to have their chances of corruption and  their patronage power reduced. Thus, the collision of cultures has come.

Political owners base their programs on the electorate's preferences. Normally poor in technical skills, they address ambitious goals and they share the development strategy with their networks of supporters. Civil servant managers on the other hand draw on budget limitations and develop institutional programs within the realm of public procedures and selections. The two cultures never merge easily: sometimes political owners push their civil servant to avoid public procedures and directly reach their goals; sometimes managerial civil servants actively strive against reforms to avoid costly organizational changes and to get a pay back out of their extra effort. Political owners claim unchallenged leadership because of their democratic representativeness, but managerial civil servants claim to be defenders of constitutional regulations. Whatever the outcome, the discussion between the two cultures turns into an impossible conversation and both discussants invest greater resources into the conversation and the leadership within it than into political programs or economic efficiency, thus compromising the overall goal of the organization they work for.

To sum up, the Italian reform of public institutions of 2000 has split the control of national and local institutions between two independent groups of stakeholders: a political group, acting as a family run business owner, and a civil servant group, acting as a managerial class. This coexistence is among the factors that contribute to Italian public institutional complexity. The two groups hardly share the same ideals and they fiercely compete to impose their designs, ie to plan, and evaluate criteria, so that in the end very few designs at all come into practice.
There is an ongoing clash of cultures underneath every Italian public organizations, and how to address this clash and bring it to synthesis is indeed a key issue of contemporary political debate. On one side stand managerial supporters sponsoring a further move towards managerial logic, somewhat leaving political and strategic leadership to the European level; on the other side stand supporters of traditional Italian values sponsoring a stronger emphasis on political class and  social sphere and the ability to make valuable choices running state affairs as in a big household. What is at stake is a successful conversation able to merge the two subcultures and make them cooperate towards shared goals and procedures.

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Notes:
1) The new reformed has been introduced by “Decreto legislativo 267/2000”. The full text and following updates are online at http://www.altalex.com/index.php?idnot=1091. A commentary to the main aims of the reform is given by Delpino, Del Giudice, 2012.
2) Cfr. Chandler, 1977
3) In this paper, culture is intended in its anthropological sense, connoting stories, history, expectations, artifacts, symbols and values that differentiate a group of people from the other one. (Klamer, 2013)
4) Cfr Klamer, 2007 for an extensive discussion of the concept of “conversation” and competition between ongoing conversations.

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References:
Chandler, A. D. (1977). The Visible Hand. The Managerial Revolution in American Business. Harvard: Harvard University Press.
Del Pino, L.; Del Giudice, F. (2013). Diritto Amministrativo (“Administrative Law”). Napoli: Simone Editore.
Klamer, A. (2007). Speaking of Economics. How to get in the conversation. New York: Routdlege (series Economics as Social Theory).
Klamer, A. (2013). Doing the right thing. A Value Based Approach to Economics. 

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