New Page 1

THE OPTIMAL PROVISIONING OF QUALITY MUNICIPAL SERVICES: A CONCEPTUAL FRAMEWORK AND METHODOLOGICAL DISCUSSION

DR. DAVID MARTIN JUANIL
PROF. DR. MAZIAH ISMAIL
Department of Construction and Property Management
Faculty of Technology Management
Kolej Universiti Teknologi Tun Hussein Onn
86400 Parit Raja, Batu Pahat, Johor
(E-mail: martin@kuittho.edu.my, maziah@kuittho.edu.my)

Local Government management has to be understood as part of the public domain but with its own special purposes and conditions reflecting its political nature and as organisations for the delivery of public services (Stewart, 1988). Within this context, local governments therefore have to change and adapt to the many driving forces. Amongst these are new public expectations about their role in a changing society, a constant flow of interventions from higher level governments restricting local initiative, and new ideas about the nature of good management in public service organisations.

Burns et al. (1994) postulated three phases in the development of local authority management (see Fig. 1). The first phase, described as unresponsive public service bureaucracies, refers to the build-up of large, highly-professionalised departments structured to mass-produce services: bureaucratic with a defined department for each service, an administrative hierarchy of control, a set of procedures for uniformity of treatment, and groups of professionals to perform tasks. While such departments provide an impartial and fair service to the population, they are often inflexible and insensitive in their dealings with the public.

The second phase sees an emergence of three sets of reactions. The first broad alternative seeks to challenge the very notion of collective and non-market provision for public need. Centring on the notion of privatisation, it seeks to replace public provision with private with the central theme for local government policies as “enabling, not providing”. The argument runs that the role of the local authority should no longer be that of universal provider but should be to encourage a diversity of alternatives, with elements of competitions between different providers. The second alternative, shown on the right of Figure 1 aims to preserve the notion of public provision, but seeks a radical reform in the manner in which this provision is undertaken.

While these two mechanisms are strongly contrasting, they are not mutually exclusive. The first approach prefers the extension of markets. In this model the customer, dissatisfied with the product of one supplier of a service, can shift to that of another. In theory, this switch sets in motion market forces which may induce recovery on the part of the service provider that has declined in comparative performance. It also suggests that an alternative to competitive models is the extension of democracy which is concerned with strengthening voice. This starts from the position that many services cannot be individualised as they relate to group of consumers or citizens at large. Hence, municipalities pursuing this strategy place their primary emphasis on democratisation of local government service provision. The focus is not so much on the individual recipient of services, rather it is on the interaction between representative institutions (in this case local governments) and the communities they serve.

There is a third broad strategy for public service reform which has been labelled as “new managerialism”. This managerialism response borrows from the two competing models but in a form which preserved existing power relations between producers and consumers of services. In place of the sometimes violent and unpredictable signal of exit and voice a panapoly of techniques are developed to provide more gentle and manageable “feedback”. The key point about feedback as opposed to “pressure” is that it doesn’t force the organisation to respond. Rather, if a consensus for change can be engineered from within the organisation, it provides the informational basis for self-improvement.

The modern trend in the developed world is to separate policy making from policy implementation, and to include management techniques used in the private sector or to privatise interests (Auriacombe, 1999). Osborne and Gaebler (1992) use the concept “entrepreneurial government” to describe this new model of government, also called the New Public Management (NPM). Hood (1991) summarises its components in terms of the shift towards the disaggregation of administrative units; the creation of explicit standards and measures of performance; an emphasis on results rather than procedures; the use of contracts and franchise arrangements inside as well as outside the public sector; the promotion of competition; and a stress upon private sector styles of management. The NPM, according to Mwita (2000) has influenced a comprehensive process of change to public sector organisations with emphasis on decentralisation, devolution and modernisation of public service delivery.

Such public orientation challenges the enclosed organisation of local authorities and argues for greater responsiveness to the public as customers and as citizens. It requires local authorities to look at their services from the viewpoint of the public rather than from the standpoint of the organisation. It also recognises an important role for the citizen as a participant in policy making. As Sekoto and Straaten (1999) explains, a customer-focused approach in the public sector dictates that it provides services that are responsive to the needs of its primary customer, the public, with the objective of improving service delivery.

Briefly, the changes in emphasis within the public services are given as follows (Burns et al., 1994: 20):

1) From an emphasis on hierarchical decision making to an approach stressing delegation and personal responsibility;

5) From an emphasis of professional judgement to an approach emphasising the management of contracts and trading relationships within an internal market; and

6) From a culture that values stability and uniformity to one that cherishes innovation and diversity.

Decentralisation denotes a process which counters the process of centralization. Administratively, it means reversing the concentration of administration at a single centre and conferring powers at the local level. This process, according to Smith (1985) involves the delegation of power to lower levels in a territorial hierarchy, whether the hierarchy is one of governments within a state or offices within a large-scale organisation. Local governments themselves, for example, may employ various kinds of administrative decentralisation within the internal organisations of their administrative departments. Hudson and Plum (1986) attributed this to a situation where effective control over events in their area is given to residents of that area via their control through representatives of the machinery of local government.

In Britain, the concept of “area management trials” has been adopted by local authorities which attempted different forms of decentralisation primarily concerned with neighbourhood autonomy and popular democratic control. Burns et al. (1994), conceptualised such form of decentralisation as providing four interlocking and mutually reinforcing components given in Table 1.

TABLE 1: Neighbourhood Decentralisation: An Ideal-type Model

1	Localisation	The physical relocation of services from a centralised to a neighbourhood or “patch” level.
2	Flexibility	The promotion of more flexible forms of management and work organisation through multidisciplinary team working, multiskilling, local general and corporate management.
3	Devolved management	The devolution of decision making powers to service delivery managers and staff.
4	Organisational culture change	The reorientation of management and staff values to promote quality of service and local democracy through greater user empowerment.

Neighbourhood decentralisation, therefore, is designed to shift power to smaller jurisdictions than those which constitutes the formal structure of municipal governments, often having been closely associated with the vogue for participation (Smith, 1985). The emphasis here can be explicitly implied to mean either customer, consumer, citizen or community-focussed approach to management. This impetus for change towards different forms of neighbourhood management has stemmed from the recognition and the need to respond to many concerns as set out in Table 2. Table 3 outlines the objectives of neighbourhood decentralisation. In the context of this paper, the emphasis is on the potential of decentralisation as a vehicle for empowering the people in the neighbourhoods (citizen participation).

Epstein et al. (2000) describes citizen engagement as referring to the involvement of “citizens”, a term used in the broadest sense to include individuals, groups, non-profit organisations and even businesses as corporate citizens. Private organisations are included primarily in the sense of their participation for public purposes rather than only to protect narrow private interests. In this view, citizen engagement in a community is best when it is broad, inclusive and representative of citizens and interests from the entire community. Whilst performance measurement is needed to determine whether results are achieved, citizen engagement helps assure they are the results that matter to the people of the community.

TABLE 2: Typical Complaints About Public Service Bureaucracies

1	Unresponsive	Front line staff do not have the authority to respond to the public.
2	Uninformative	Few people understand council procedures.
3	Inaccessible	Services are located in huge, hostile buildings miles away from where people live, and public meetings are unwelcoming.
4.	Poorly coordinated	Despite corporate management initiatives, departmentalism and professionalism have grown stronger.
5	Bureaucratic	Virtually every decision has to be made with reference to the “rule book” or involves senior management. This requires large amounts of paperwork and causes long delays.
6	Unwilling to listen	Staff are trained to be more concerned with departmental and professional objectives than with listening to the problems of the public. Answering a public enquiry is often seen to be a distraction from work.
7	Inefficient	There is a massive waste as a result of duplication between departments and the application of uniform policies which have no flexibility to respond to local needs.
8	Unaccountable	Front line staff and their managers cannot be properly held to account for poor performance if they lack control over the resources that are necessary to deliver services, nor can politicians be held to account for decisions made in remote central committees which have an impact in unforeseen ways on local communities.

1	Improving services	More sensitive service delivery. Changing the relationship between public servants and the public: public at the top. Service panning and policy.
2	Strengthening local Accountability	Enhancing public influence and control. Making performance more visible to the public. Strengthening the power of ward councillors. Promoting community development.
3	Achieving distributional aims	Targeting resources on different areas/groups.
4	Encouraging political awareness	Winning political support for public services. Increasing public knowledge about local issues. Winning support for a political party.
5	Developing staff	Enhancing job satisfaction from working more closely with the public. Creating a friendly work environment. Encouraging neighbourhood loyalty.
6	Controlling costs	Developing management control to improve cost-effectiveness.

It is difficult to point to a widely accepted “good practices framework” either for citizens or for those attempting to engage citizens. There are, however, six roles outlined by Epstein et al. (2000) by which citizens become partners in performance management.

The application of customer service techniques to government services has been gaining momentum in many countries. The core idea is that a citizen should be treated as a valued customer by providers of public services. This momentum builds on a decades-old trend in the private sector to improve product and service quality for customers. Market research techniques, including customer surveys and focus groups, have become a mainstay in the private sector and have gained currency in some localities and public services.

In a democratic society, citizens are the “owners” of public services. Through their tax payments, citizens are investors in public services and publicly-owned assets. Through their votes, citizens are shareholders who elect the “boards of directors” responsible for the performance of their governments. Elected officials are the people’s stewards not only to responsibly manage finances but also to produce desirable results for the public.

There has been a major upswing at the local and state level in engaging citizens in identifying and framing issues of concern for communities to guide planning and action. Citizens can act as “issue framers” in a number of ways, some of which are:

1. Vision builders. Citizens have been called on to help to be “visionaries” for their communities to articulate a desirable future and broad strategies to get there as part of community visioning and strategic planning.

2. Advisers. Citizens have been called on to provide advice for such things as land use, budgeting, or specific services or issues. The “adviser” roles include:

3. Community-wide Advisers. Citizens are called to serve on short or longer term community-wide advisory committees.

4. Street Level Advisers. Citizens serve on block clubs, neighbourhood associations, or other groups that identify needs, recommend priorities, and attempt to obtain service adjustments and improvements within specific neighbourhoods or districts.

Beyond being customers, owners, and issue framers, citizens and citizen groups are also often asked to play an active role in actually providing or helping to provide important services, or in solving specific problems to contribute to achieving a “community vision”. Many communities now recognise that when it comes to resolving many important issues, government cannot or will not do it alone. Productively engaging volunteers and citizen groups as partners with government can leverage public resources with citizen effort to multiply the improvement of results for communities. Examples are crime prevention programs such as Neighbourhood Watch (Rukun Tetangga) and Business Watch, designed to encourage and facilitate effective community action to deter crime.

Citizens can also act as partners in efforts to improve public services by assessing the performance of public services. Acting as “customers”, citizens sometimes evaluate services simply by filling in a reply card after receiving a public service. As more deeply involved customers, citizens may become engaged in survey research or focus groups. At a still more involved level, citizens may become “evaluators” if they are trained as service quality raters to directly assess the performance of public services from street cleanliness, to library stack completeness, or to the quality of a public transport ride.

Having citizens rate services can also instruct residents about government’s effort to measure its performance and satisfy the citizenry it serves. Engaging citizens in this way can lead to a more interested and informed community.

In a number of communities, citizens have gotten involved in community and regional improvement independently of government. Citizen groups have established sets of desired outcomes for their community and established systems to track and publicise the results of these outcomes. These groups follow various themes, such as “healthy communities”, “quality of life” and “sustainable communities”.

The perceived inefficiency and ineffectiveness in the administration of revenue sources and poor delivery of services continue to impede the healthy and orderly development of local authorities in Malaysia. The question that almost always arises is in the adequacy of service provision: the efficiency, effectiveness and efficacy of local authorities in performance (Phang, 1995).

According to Phang (1997), Malaysian local authorities maintain a difficult financial existence constrained by the mavericks of local government politics, rising costs in service delivery and having to keep up with the increasingly articulate populace. The crux of the matter will be the question of how local government can and should respond to the issue of municipal services provision given such constraints.

The general consensus among scholars and practitioners is that local authorities which are better equipped financially tend to deliver more efficiently and effectively compared to the less fortunate ones. It has also been consistently argued that local authorities will face a continuing squeeze on their limited financial resources if increased revenues are not forthcoming.

Studies by Phang et al. (1988) revealed that there seems to be inadequate accounting of debts or arrears owing to the local authorities in Malaysia, and compilation of up to date service statistics is lacking, hence the inability of local authorities to monitor progress and evaluate performance. Except in very rough terms, most local authorities do not know their costs in carrying out particular services or activities. This is especially true where most municipal accounts often group expenditures according to the type of item for which the expenditure was made, rather than according to the service whose operations gave rise to the expenditure.

In addition, there is also no proper system of “revenue apportionment” for the optimal allocation of resources that could also serve as a reliable indicator on the level of income needed to provide services. Closely related to this matter is the issue of quantifying service standards. There is no definition on the level of “service standards” from citizens’ viewpoint thus severely compromising service quality that can be used as a benchmark for the provision of these services. As Stewart (1988: 49) aptly puts it:

“Does the local authority judge its performance by its internal efficiency or by the quality of service provided? ...can easily become a purely internal matter, measured by the comparative efficiency with which services are carried out. ...it is economy and efficiency that receives the emphasis rather than effectiveness. The enclosed authority measures performance by the standards of the organisation rather than the public it serves.”

Moreover, local authority services are typically paid out of a budget allocation, which means that they are not paid for by what ratepayers mean by results and performance. In other words, their revenues are collected from a general revenue stream that is not tied to what they are doing but obtained by tax levy or tribute (Drucker, 1973).

Put simply, services are deeds, processes and performances (Zeithaml and Bitner, 1996). It is a complicated phenomenon with many meanings ranging from personal service to service as a product. According to Gronroos (1990), there are a range of definitions suggested in the service literature all looking very narrowly upon the service phenomenon but each having its own benefits and drawbacks. Reflecting upon the limitations of these definitions, he offered the following blend of all these definitions:

“A service is an activity or series of activities of more or less intangible nature that normally, but not necessarily, take place in interactions between the customer and service employees and/or physical resources or goods and/or systems of the service provider, which are provided as solutions to customer problems” (Gronroos, 1990: 27).

As in all the other definitions, customers are the primary benefactors for service providers, the concept of which is being embraced in the NPM and potentially attainable by strategic and innovative management practices through decentralisation approaches.

Among the most basic attributes of services discussed in the literature pertains to its intangibility, social interactions and simultaneous occurrence between service provider and consumer. Bowen and Cummings (1990) described services as being intangible experiences that are rendered but which are difficult to assess both in terms of its output and quality that would otherwise help shape the attitudes of both customers and front-line employees about the process and outcome of service delivery.

According to Collier (1990), a common characteristic of the literature that attempts to define and model service quality is its interdisciplinary nature which requires knowledge of marketing, psychology, operations, human resource management, economics and business strategy. It is a complex and multifaceted concept; and a universal definition of quality is not readily apparent in the literature (Galloway, 1999). Quality has been defined in many ways, such as conformance to specifications, the degree to which customer specifications are satisfied, a fair exchange of price and value, fitness for use and doing it right the first time.

Galloway (1999) observed that most service literature use the term quality to mean perceived service quality (by the customer) which is rather different to the definitions based upon specifications and conformance. The first view is defined through a comparison by the customer of his or her expectations prior to experiencing the service with service delivery system performance whilst the second view regards service quality as consistently meeting customers expectations through a clearly defined service package specification (Collier, 1990).

A third, and perhaps most sophisticated and relevant view of service quality is one that recognises several ways of misspecifying and mismanaging the definition and delivery of excellent service quality (gap analysis). This is conceptualised by the service quality model forwarded by Parasuraman et al. (1985) and Zeithaml et al. (1988) intended for analysing sources of quality problems and helping managers understand how service quality can be improved.

It has been recognised that the continuing rapid urban growth in Malaysia and with it, rising expectations of the populace for urban services has undeniably posed serious and potentially dangerous strain on local authorities’ ability and fiscal resources in delivering their designated services (Phang, 1997).

This is further exacerbated by the non-availability of economics of scale in responding to the needs of increasing urban population (Montgomery, 1985). Along with the perennial problems associated with urban management, this becomes a big task for municipal managers who would have to cope with the coordination and integration of these municipal services, thus stretching their limits beyond existing capacities and resources.

There are many definitions to performance in the literature, one of which refers to it as outcomes of work because they provide the strongest linkage to the strategic goals of the organisation, customer satisfaction and economic contributions (Rogers, 1994). Campbell (1990) premises that performance is behaviour and should be distinguished from the outcomes because they can be contaminated by system factors. Mwita (2000) argues that it is important for an organisation to distinguish between outcomes (results/outputs), behaviour (the process) and appropriate performance measures, subscribing to the view that performance can only be achieved if it embraces three interrelated variables, namely behaviours, outputs and outcomes (value added or impact).

To be meaningful, performance should be measured by indicators which provide a separate quantitative measure for each aspect of a unit’s activities (Hodgkinson, 1999). It should be measured against some level of minimum predefined standards. Performance measurement therefore refers to the development of indicators and collection of data to describe, report on and analyse performance (Epstein et al., 2000). Measurement can apply to government services or community conditions (for example, physical or environmental conditions, public health and safety, or economic and social conditions) or to both. It is needed to determine whether results are achieved.

Premising on the foregoings, this paper has managed to recognise six fundamental elements of effective governance in the management of municipal service provisioning, given as follows:

1. Citizen Engagement: adopted from the philosophy of NPM, a customer-focussed approach which aims at improving the quality of public sector service delivery.

2. Decentralisation: an effective means of governance which promotes service delivery by means of localisation of services and employee empowerment.

3. Service Quality Management: bridging the gap of actual delivery and customer perception adopted from the gap analysis approach.

4. Performance Measurement: quantitative standards of performance management against which organisations can measure their own actual performance in delivering services.

5. Service Management: an important component that would dictate the successful management and delivery of services, i.e. the manner in which the services are managed and means of delivery.

6. Strategic Management Tool: an organisational “check list” tool that would assist in the strategic management of the organisation.

These elements are depicted in the conceptualised framework of municipal service provisioning given in Figure 2. Within the local government management framework, these elements provide for the extension of local democracy, i.e. strengthening of the “voice” option through feedback mechanisms such as user satisfaction surveys, citizen surveys, complaint procedures and customer care programmes. At the same time, the framework as a whole advocates the “new managerialism” concept hence emphasising a mix of the voice and self-improvement models of local authority management. This is consistent with the view that market models which promote the “exit” option are likely to damage local democracy because they tend to accentuate an individualistic perspective, therefore promoting ways which are selfish working against collective concerns and actions.

This paper intends to propose a methodology for assessing local government performance that focuses on efforts by local authorities to mobilise sufficient resources, to provide a range of basic services in a cost-effective manner, and to do so that accords with citizens’ preferences. However, it has to be accepted that measuring performance is a hazardous task; no neat definition exist (Parker, 1998). This methodological approach is given below:

3. Estimate the corresponding expenditures needed to meet present standards. The purpose of this exercise is to gauge local authorities’ service provisioning burdens at current level.

4. Investigate whether the services provided correspond to citizen preferences. Determine what services are under-provided, provided at acceptable level or permissible standards, or are over-provided as preferred by citizens. Assess the extent to which the local authority provides the services in a cost-effective manner, and at what level of quality they are being provisioned.

5. Estimate the corresponding expenditures needed to meet permissible standards as preferred by citizens. This would define what constitutes a social optimum in the allocation of resources.

6. Establish if the local authority has access to sufficient resources to meet permissible standards. Assess the extent to which the local authority makes sufficient fiscal effort to obtain all revenues potentially available.

The ideology for the proposed framework and methodology for municipal service provisioning propounded by this paper is citizen engagement. Hence, to obtain the input needed from citizens, a citizen survey could be developed in the form of a community survey questionnaire covering various issues. The purpose of this citizen survey is obvious: to have a balanced view of local authorities’ service provisioning situation from the perspectives of citizens or ratepayers. The main aim is to obtain first hand knowledge of citizen experiences of local authorities’ services, their perception of quality, what standards of services they expect of local authorities, and how they rate local authorities’ performance generally.

It is suggested that the mode of analysis for the proposed operational methodology be conducted in two stages.

For the first stage, the use of the three kinds of measure suggested by the literature in describing a municipal’s level of public services could be adopted i.e. percentages of budget, variety of services provisioned and expenditure per capita in provisioning services.

Foremost, in measuring the preferences of citizens for particular municipal services, the Median Preference Model (MPM) can be adopted. This model, according to Hoffman (1976), offers one mechanism for relating the distribution of citizen preferences to an expected level of government policy output. The model assumes that alternative policy options may be arrayed along a single dimension which may be represented by the amount of public expenditures devoted to the policy, in this case, the cost of provisioning of municipal services. The MPM is operationalised by calculating the difference between the percentage of the surveyed population who desire increased spending and the percentage who desire decreased spending on a municipal service.

This entails measuring service quality according to citizen perceptions. The term “quality” in this context is not strictly confined to specific dimensions of service quality which are usually intangible in nature. Given the more tangible characteristics of municipal services, it is felt that an overall perception of each municipal service based on citizen experiences and expectations will suffice. A measure could be provided for gauging citizen preferences according to quality level perceptions in order of satisfactoriness based on their experiences by observing frequency counts and mean scores of respondents’ perception of satisfactoriness for each municipal service.

This paper proposes a system of fiscal equalisation for the purpose of provisioning municipal services. Such approach is adopted from Reidenbach’s (1988) financial equalisation concept (see Phang, 1992). By this method, it is proposed that local authority revenues are apportioned by way of weighted variables in relation to population size, an essential criterion for all fiscal equalisation systems. The basic principles underlying the concept are given in the following.

1. Measuring the Fiscal Needs (FN) and Fiscal Capacity (FC) of local authorities;

2. Identifying the residue or Fiscal Gap (FG), i.e. when FN is greater than FC; and

Descriptive statistical techniques could also be used to draw certain conclusions about the population parameters from sample data collected.

This paper traced the wave of change within public sector management, propagated by new ideas of management such as the NPM. Decentralisation is being seen as one strategy that can be effectively employed in achieving this purpose. Local government management has also been experiencing changes with three main approaches: extension of markets, strengthening local democracy and self-improvement. This phenomenon of change has essentially been motivated by the needs of governments to improve the quality and delivery of services to their populace, and within the local government context, the manner in which municipal services are provisioned. Drawing upon these bodies of literature, a conceptualised framework for municipal service provisioning was proposed, followed by an operational model for analysing local government performance, focusing on the capacity of municipalities to mobilise sufficient resources, and to provide a range of basic services in a cost-effective manner in a way that accords with citizen preferences.

TABLE 1: Neighbourhood Decentralisation: An Ideal-type Model

TABLE 2: Typical Complaints About Public Service Bureaucracies