Analysing Network Governance of Public Assets

• Published date: 01 November 2007
• Date: 01 November 2007
• Author: Shann Turnbull
• DOI: http://doi.org/10.1111/j.1467-8683.2007.00632.x

Analysing Network Governance

of Public Assets

Shann Turnbull*

This paper provides a framework for evaluating the strengths and weaknesses of Australian

public assets when owned by: (i) a government department, (ii) a State owned corporate body,

(iii) private investor’s, or (iv) a network of constituents. The framework evaluates the generic

characteristics of the four different types of governance architectures by considering their: (i)

accountability, (ii) quality of service, (iii) operating costs, (iv) funding (v) cost of f‌inance, and

(vi) political outcomes. Network governance introduces distributed: communications, intelli-

gence, decision making, and control which can be used to augment and/or replace the centra-

lised architecture of the other three alternatives. Network governance is identif‌ied as a

condition precedent for developing self-governance and enriching democracy.

Keywords: Accountability, constituents, democracy, network governance, privatisation,

public private partnerships, self-governance, stakeholders

1. Introduction

This paper provides a framework for

evaluating the strengths and weaknesses

of Australian public assets when owned by:

(i) a government department, (ii) a State

owned corporate body, (iii) private investors,

or (iv) a network of constituents. The frame-

work evaluates the generic characteristics of

the four different types of governance archi-

tectures by considering their: (i) accountabil-

ity, (ii) quality of service, (iii) operating costs,

(iv) funding (v) cost of f‌inance, and (vi)

political outcomes.

Network governance provides a way for

“decomposing the enterprise in eff‌icient

information processing respects” (Williamson,

1985, 283) to recognise the “neurophysiologi-

cal limits” of executives (Williamson, 1975, 21).

As pointed out by Mathews (1996, 32) the

“reduction in data transmission and data com-

plexity” can be “prodigious” with a form of

network governance based on a holonic archi-

tecture. In this way network governance

reduces “communication overload” (William-

son, 1985, 281) and “bounded rationality”

(Williamson, 1975, 4–7). It also allows network

governance to greatly enhance the volume and

integrity of communications and control for

detecting and correcting errors to improve

economy, eff‌iciency and effectiveness.

Other attractions of public assets being

owned by the constituents they service are: (i)

no increase in public sector debt; (ii) replacing

Ministerial accountability with constituents

being accountable to themselves; (iii) enrich-

ing democracy by direct citizen participation

in the control of public assets; (iv) changing

the role of government from direct interven-

tion to establishing the rules of the game for

self-governance; (v) increasing economy, eff‌i-

ciency and effectiveness by replacing private

sector competition for control through

markets and regulation with internal competi-

tion for control among constituents who have

competing interests; and (vi) avoiding auto-

cratic or plutocratic control of public assets by

investors that undermines democracy and

creates resentment.

During the end of the 20th century the UK

became a global role model for privatisation.

But at the turn of the century some privatised

enterprises like Railtrack and Welsh Water

experienced diff‌iculties. This created interest

in f‌inding a different approach based on

network governance (Turnbull, 2002a).

*Address for correspondence:

International Institute for Self-

governance, PO Box 266 Wool-

lahra, Sydney, Australia, 1350.

Tel: +612 9328 7466; Fax: +612

9327 1497; E-mail: sturnbull@

mba1963.hbs.edu; http://

www.aprim.net/associates/

turnbull.htm

ANALYSING NETWORK GOVERNANCE OF PUBLIC ASSETS 1079

Volume 15 Number 6 November 2007

© 2007 TheAuthor

Journal compilation © 2007 BlackwellPublishing Ltd, 9600 Garsington Road,

Oxford, OX4 2DQ, UK and 350 Main St,Malden, MA, 02148, USA