Public Services or Corporate Welfare , livre ebook

Dexter Whitfield
Public Services or
Corporate Welfare
Rethinking the Nation State
in the Global Economy
Pluto P Press
LONDON • STERLING, VIRGINIAFirst published 2001 by Pluto Press
345 Archway Road, London N6 5AA
and 22883 Quicksilver Drive,
Sterling, VA 20166–2012, USA
www.plutobooks.com
Copyright © Dexter Whitfield 2001
The right of Dexter Whitfield to be identified as the author
of this work has been asserted by him in accordance with
the Copyright, Designs and Patents Act 1988
British Library Cataloguing in Publication Data
A catalogue record for this book is available from
the British Library
Library of Congress Cataloging in Publication Data
Whitfield, Dexter.
Public services or corporate welfare : rethinking the nation state
in the global economy / Dexter Whitfield.
p. cm.
Includes bibliographical references and index.
ISBN 0–7453–0855–4 (hc) — ISBN 0–7453–0856–2 (pb)
1. Welfare state. 2. State, The. 3. Privatization. 4.
Globalization.
I. Title.
JC479.W483 2000
320.1—dc21
00–008744
ISBN 0 7453 0855 4 hardback
ISBN 0 7453 0856 2 paperback
10 09 08 07 0605 04 03 02 01
10 987654 3 2 1
Designed and produced for Pluto Press by
Chase Publishing Services, Sidmouth, EX10 9QG
Typeset from disk by Stanford DTP Services, Northampton
Printed from PDF files in the European Union
by TJ International, Padstow, EnglandTo Dorothy CalvertContents
List of Tables and Figures x
Abbreviations xii
Acknowledgements xiv
Preface xv
Introduction: The Global Corporate Agenda 1
The seven-issue corporate agenda 3
The nation state 15
1 Public Goods, Public Risk and Power Struggles 19
Global and national public goods 19
Global risk or risky business 22
Competition, power struggles and alliances 26
Reconfiguring the state–market–civil society paradigm 33
2 Nation States: Facilitating and Accommodating
Globalisation 37
Globalisation, regionalisation and the nation state 37
How the state facilitates globalisation 46
Privately financed infrastructure and sustainable development:
mortgaging the future 53
States make markets 60
Globalisation of Public Management 62
3 Modernising the State: A Third Way for Competition 63
The roots of transformation and modernisation 63
The objectives of transformation and modernisation 66
Role of the state 71
Financing the state 85
4 Modernising the State: New Organisation and New
Management? 101
Organisational structure of the state 101
Managing the state 114viii PUBLIC SERVICES OR CORPORATE WELFARE
5 The Emerging Corporate-Welfare Complex 130
Resilience to change 130
New challenges for the welfare state 133
The Third Way welfare state 141
Pensions and social security – the global market 147
The new corporate-welfare complex 155
6 The Price of Neo-Liberal Modernisation 165
Macroeconomic impact 165
Asset stripping and high transaction costs 167
Employment impact 174
Democratic accountability and user/employee involvement 178
Fragmenting the state 180
Equality and social justice 182
Quality of service 183
The performance state paradigm 185
Ownership and control 189
Partnerships 191
The effect on state capacity 197
7 The Nation State in 2020 204
New world (dis)order 205
The corporate or minimalist state 210
The enabling or partnership state 212
The third sector or social economy state 215
Other models 219
8 Redesigning the State – A New Public Order 221
The state in capitalist society 221
The core functions of the state 224
Extending democratic accountability and new models of
governance 229
Taxation of income, consumption and corporate profits 231
Reversing marketisation and privatisation 233
New financial and regulatory architecture to control capital 240
Promoting civil society, citizenship and the social economy 247
Maintaining universal welfare systems 248
Reducing poverty through empowerment, redistribution,
equalities, regeneration and control of development 249
Creating jobs and quality employment 250
Imposing corporate governance and social accountability 250
Maintaining macroeconomic stability and investment 252CONTENTS ix
9 A New Public Service Management 253
Principles of public service 253
A blueprint for a new Public Service Management 258
Corporate policies, values and public service ethos 259
Democratic accountability and communications 261
Social Justice Planning and Auditing 262
Innovation, redesign and capacity building 269
User and employee/trade union involvement 270
Strategic researching and planning social and economic needs 275
Quality systems and performance review 277
Monitoring, evaluation and learning environment 278
Public sector networks, partnerships and strategic sourcing 279
Quality employment & training 282
10 New Strategies and Alliances 284
Bibliography 287
Index 306List of Tables and Figures
TABLES
1. Changes in average taxation in OECD countries 12
2.1 Gross global privatisation proceeds 1990–8 48
2.2 FDI from privatisation (asset sales) in developing countries
1989–94 51
2.3 Growth of cross-border mergers and acquisitions in privatised
service sectors 1991–7 52
2.4Signed project deals by country, 199657
2.5 Investment in infrastructure projects with private participation
in developing countries 1990–8 58
2.6Growth in private cross-border flows to infrastructure 59
3.1 Privatisation typology 76
3.2 Summary of privatisation in Britain between 1979 and 1997 79
3.3 Privatisation and transfer of services and agencies (1990–2000) 80
3.4 State expenditure as a proportion of GDP 86
3.5 Changes in provision, finance and decision of public/private
welfare 88
3.6Infrastructure privatisation in Britain 93
3.7 Sector analysis of PFI projects in Britain 95
3.8 Financial impact of health PFI projects 96
4.1 New public service markets in Britain 119
5.1 Ageing of population in major industrialised countries 2000–30 135
5.2 Social welfare public expenditure in selected OECD countries
(% of GDP, 1993) 138
5.3 Health expenditure in various industrialised countries (1998) 139
5.4 Comparison of public/private welfare state costs in Sweden and
USA (1990) 140
5.5 Asset value and allocation of European pension funds
(end 1996) 151
5.6European pensions costs (projection as a % of GDP) 152
5.7 Types and purpose of corporate welfare 160
5.8 Cost of US tax breaks for business and investment in 2000 161
5.9 State support for private infrastructure projects 162
6.1 How public assets in Britain were undervalued 168
xTABLES AND FIGURES xi
6.2 Service price increases (in real terms) 170
6.3 Change in public sector employment (headcount, thousands) 174
6.4 Complaints in privatised services 184
6.5 Capital cost of PPP hospital projects 191
6.6 Hospital construction and availability costs 192
6.7 Partnership and private finance failures 194
8.1 Different types of state capacity 227
8.2 Goals of economic and ecological sustainability 246
9.1 The key characteristics of Public Service Management 256
9.2 The evaluation context 280
FIGURES
Intro. The ‘E’ model of government 10
3.1 A political economy typology of transformation and
modernisation 71
3.2 Methods used to privatise services 90
3.3 The spiral of public sector decline and opportunity for capital 96
5.1 The corporate-welfare complex 156
8.1 The core functions of the state 225
8.2 The organisational and operational framework of the nation
state 231
9.1 Key components of Public Service Management 259
9.2 Social Justice Planning and Auditing model 265
9.3 Income and expenditure flows to and from the local economy 268Abbreviations
APEC Asia-Pacific Economic Cooperation
ASEAN Association of South East Asian Nations
BID Business Improvement District
CCT Compulsory Competitive Tendering
CDC Community Development Corporation
DETR Department of the Environment, Transport and the Regions
DfEE Department for Education and Employment
DSO Direct Services Organisation
DSS Department of Social Security
EAZ Education Action Zone
EU European Union
ERM European exchange rate mechanism
ESOP Employee Share-Ownership Plan
FDI Foreign direct investment
FT Financial Times
FTE Full-time equivalents
GATS General Agreement on Trade and Services
GATT General Agreement on Tariffs and Trade
GDP Gross domestic product
GGFD General Government Financial Deficit
G8 Group of 8 leading industrialised countries
HAZ Health Action Zone
ICC International Chamber of Commerce
ICT Information and communications technology
IFC International Finance Corporation
ILO International Labour Organisation
IMF International Monetary Fund
MAI Multilateral Agreement on Investment
MERSCOUR Southern Cone Common Market (Latin America)
MIGA Multilateral Investment Guarantee Agency
NAFTA North American Free Trade Agreement
NAO National Audit Office (UK)
NATO North Atlantic Treaty Organisation
NGO Non-governmental organisation
xiiABBREVIATIONS xiii
NHS National Health Service (UK)
NPR National Performance Review
OECD Organisation for Economic Cooperation and Development
PFI Private Finance Initiative
PLC Public Limited Company (UK)
PPP Public–Private Partnership
PSDR Public Sector Debt Repayment (UK)
PSNB Public Sector Net Borrowing (UK)
Quango Quasi-autonomous non-governmental organisation (UK)
REC Regional Electricity Company
SAL Structural Adjustment Loan
SERPS State Earnings-Related Pension Scheme (UK)
SOE State-Owned Enterprise
SJPA Social Justice Planning and Auditing
TANF Temporary Assistance for Needy Families
TNC Transnational corporation
TQM Total Quality Management
UK United Kingdom
UN United Nations
UNCTAD United Nations Conference on Trade and Development
UNDP United Nations Development Programme
US United States
VAT Value Added Tax
VFM Value for money
WTO World Trade OrganisationAcknowledgements
Many people and organisations with whom I have worked over the last
decade have contributed to the analysis and ideas in this book through their
commitment to the provision of good quality public services, democratic
accountability, equalities and social justice.
I am particularly indebted to Lee Adams, Dorothy Calvert, Karen Escott,
Keith Hayman, Andy Mott, Ursula Murray, Mick Paddon and