Speakers:
Adam Lent, Author of "Making Choices; how can choice improve local public services?"
Richard Batley, International Development Department - School of Public Policy - University of Birmingham

Chair:

Simon Maxwell, Director - ODI

1. The fifth meeting of the series on Targets, Voice and Choice was held in the ODI Meeting Room on Wednesday 17 November. The speakers were Adam Lent and Richard Batley from the University of Birmingham. The meeting was chaired by Simon Maxwell, Director of ODI.

2. Adam Lent started by stating that the introduction of choice mechanisms in public services is an issue which has polarised public opinion in recent times. On one side there are those who firmly believe in "giving more power to the user", while on the other side there are people concerned with polarisation and marginalisation.

3. Choice is about giving the individual user, as opposed to the provider, precedence in determining some of the characteristics of the service to be provided. There are two major risks related to this: (a) inequality of access (some individuals have better sources of information and better resources, and therefore are better able to access services); and (b) polarisation of quality in service provision (i.e. cream-skimming practices) with a move towards elite treatment for those who can afford it and under-resourced provision for the poor.

4. More in general, choice can be good or bad for public services, depending on how it is introduced and managed. There are three main ways to offer users more choice: (a) collective choice, such as groups of tenants choosing who manages their estate (local councils or housing associations). The advantages of this approach are that it promotes dialogue and deliberation, and creates fewer problems about disparity and polarisation; (b) needs-based choice, such as direct payments schemes (disabled people receive a cash transfer based on an assessment of their needs rather than having a council official deciding on what is right for them). This approach is effective at addressing inequality concerns; and (c) simple choice (e.g. location of wedding ceremonies), based on simply opening up more opportunities for individual choice.

5. In introducing choice, it is important to remember that there are significant implications for capacity and management: for example, choice-based approaches require complete restructuring of skills and budgets,

6. Moreover, as not all first choices will be able to be met, there is a need to define criteria for prioritisation, and decision-making processes for setting them.

7. Richard Batley spoke to a PowerPoint presentation (see also written summary of presentation), summarising the preliminary results of an ongoing research project on non-state providers. The main question addressed was "How does government work with other service providers?"

8. The study currently underway covers four sub-sectors (primary education and healthcare, and basic water and sanitation services) and six countries (Pakistan, Bangladesh, India, Malawi, Nigeria, South Africa). A huge range of Non-State Providers (NSPs) involved in the delivery of public services (for-profit, not-for-profit, NGOs, CBOs, FBOs, etc.) was identified. Given this fact, which points to the existence of choice, how can governments support NSPs?. Is it possible for governments to have a positive relationship with them? The study aims at finding examples of constructive collaborations. The study also looks at identifying possible areas for donor support, such as policy dialogue, regulation and control, contracting and facilitation.

9. The first step in the study has been to carry out a literature review and a mapping of donor policies and activities. These have been completed. Case studies, sector and country papers are now being written, with a view to holding a workshop in January and then draft policy guidelines. Existing literature tends to focus on formal rather than informal NSPs, and it highlights problems with defining clear boundaries between different types of providers and about the difficulty of regulating and contracting. It was found that no donors have clear policies about how to engage with NSPs, even though some have a specific interest in this area (esp. USAID, WB, AsDB). In general, NSPs were receiving support in the water and health sectors, but less so in education. There was strong emphasis on promoting community management, but little on how to do that.

10. The Pakistan case study is particularly interesting in many respects: non-state provision of services has grown in response to government failure, reaching very high levels especially in health and education. For example, 53% of urban primary school enrolment is non-state; 67% of households use private medical practitioners. Poor and rich consumers alike seem to prefer non-state provision, which is mostly based on for-profit practitioners and firms. There is very little dialogue between Government and NSPs other than with large, non-profit providers. Among donor-supported activities, there is a large plethora of initiatives, but with very little information and learning involved. Regulations which exist in legislation are excessive, even though often they are not applied or are used for harassment. In contracting often there are unbalanced relationships, characterised either by weak government oversight of strong international NGOs, or by exploitative control of weak NSPs.

11. The discussion focused on the relative strength of the public vis-à-vis the private sector both in developed and in developing countries, and on issues of reciprocal "crowding out". While in the case of Pakistan it was clear that the public sector was being challenged by private providers, because of its low quality, in South Africa it seems that the push for broadening the reach of public services in the water sector may have reduced the reliance on private providers. It is often the case that reforming public services to render them more competitive, also in terms of quality, is heavily constrained by the existence of vested interests and patronage networks. Various participants were surprised by the finding that poor people chose private service providers, even when they are more expensive. One of the main issues is that of challenging the public sector to be a better provider.