Market-based reforms in government: toward a social subcontract?

The classical concept that reconciles a free and sovereign people with the authority of government is the social contract. Increasingly, governments are pursuing alternative approaches to public service delivery with the hope of achieving greater effectiveness and efficiency. This article posits that market-based reforms reduce traditional conceptualizations of the social contract between citizens and government to one between citizens, government, and private-sector interests--the "social subcontract." The relationship between citizens and government seems to have evolved into one where government sublets its responsibilities to private entities on behalf of the sovereign. With the social contract as our theoretical lens, we examine the evolution and development of the citizen-government relationship, as well as the challenges to this relationship when economic and political forces lead to a greater reliance on market-based policy and public management approaches. Finally, we seek to investigate the theoretical implications for legitimacy and accountability in public administration of moving toward a social subcontract.

All levels of government in the United States are experiencing increased fiscal and political pressure to be more responsive to the public. Often, the response to such pressures has been a growing reliance on adaptations of market-based managerial practices, organizational forms, and the privatization of service delivery.(1) Many researchers have taken normative stances regarding the appropriateness of market mechanisms for the provision of "public" goods.(2) However, few have attempted to examine how such market mechanisms potentially alter the fundamental relationship between citizens and government (Pierre, 1995; Smith & Huntsman, 1997). In the United States, the framing of the Constitution owes much to the purposeful attention given by the founders to the original conceptualizations of the social contract (Dienstag, 1996). The classical definition of a social contract is one "which grounds the legitimacy of political authority, and the obligation of rulers and subjects (and limits thereof), on a premised contract or contracts relating to these matters" (Lessnoff, 1990, p. 3).

Scholars have discussed how the classical social contract theories of Locke (1982) and Rousseau (1987) influenced the political debates in colonial America (Gough, 1936). These theories focused primarily on the origins of government itself, and the nature of the consent given by the people for the establishment of governmental authority. The importance of this basic tenet for today's circumstances is illuminated in the following passage:

The authority relation can be, we have seen, established by contract, and

sometimes explicitly so, as in the Mayflower Compact. In absence of an

explicit contract, it makes sense to construe citizens as voluntarily

granting authority in return for which the ruler pledges to protect them and

to do other things for them that they cannot do for themselves. Where

citizens accept a ruler's authority because he terrorizes or threatens them,

we can still speak of a coerced contract. The ruler offers, on his side,

release from terror and injury; and the intimidated offer, on their side, to

obey. (Lindblom, 1977, pp. 26-27)

Although few authors employ classical notions of social contracts today, some theorists have modified the classical contract theories to include distinct considerations of social justice in the relationship between citizens and the government (Medina, 1990; Rawls, 1971). Moreover, the notion of the existence of the social contract itself, and whether it implies mutual obligations, has been questioned (Simmons, 1979).

In this article, we use the basic notion of the social contract as a heuristic device to study the relationship between citizens and government. Unfortunately, few contemporary scholars seem to consider this fundamental device of political philosophy when discussing the role of government administration (Waldo, 1984). Because the United States is in the midst of a change in its philosophy of administrative practices, there is a great need for reexamination and reflection on how such changes affect government administration's political foundation.

We examine how the recent trend of adopting market-based reforms for the delivery of public goods and services translates into changes in the fundamental relationship between citizens and government. We define market-based reforms as those changes in public service arrangements (and recommended changes) that intend to reduce the scope and influence of governmental agencies (e.g., privatization and downsizing) or improve agency administration itself by creating market-like incentives. We first present a social contract framework for the analysis of governmental administrative reforms. We then employ this framework as a heuristic device to examine the historical development of public administration, the role of government in society, and the citizen-government relationship of the past century. Next, we examine how market-based reforms in government have altered the basic relationship between citizens and government. Finally, we discuss the possible implications for the theory and practice of public administration.

THE SOCIAL CONTRACT AS A HEURISTIC DEVICE

Political philosophy has long used theories of social contracts to explain the binding relationship between citizens and government. Classical social contract theories, such as those described by Locke (1982), focus on the implied contract that creates the governmental entity and brings people together in a collective community. More recent conceptualizations augment the classical approaches with attention to social justice issues (Rawls, 1971). Nevertheless, the basic concept of a social contract centers on an agreement that establishes authority and obligations. Legitimate authority is created when individuals give consent for the initiation of the agreement. This means that they concede certain individual freedoms and accept certain obligations in exchange for the provision of certain goods that they would have difficulty attaining as individuals and through other mechanisms. Therefore, the social contract framework may serve as a valuable lens, or heuristic device, through which to examine the relationship between citizens and government.

We are primarily concerned with the development of the relationship between citizens and government in terms of governmental administrative arrangements. That is, we seek to determine how the social contract changes under alternative paradigms of public administrative organizations. Consequently, our theoretical lens will be limited to those components of the contract most pertinent to this point of contact between citizens and government. The components of the social contract we examine are (a) consent, (b) obligations of citizens, (c) obligations of the government, (d) obligations of the administrative apparatus, (e) accountability--control mechanisms, and (f) government-market interaction.

CONSENT

The basis of any contract begins with individuals consenting to enter into an agreement. Whereas private contracts are necessarily explicit, social contracts are primarily characterized by implicit components. In this sense, implicit consent embodies the initial choice of individuals to forgo certain rights and freedoms and their acceptance of certain obligations in the process of entering into a collective agreement and creating a central authoritative structure. Although collective consent is more often implicit than explicit, it is nevertheless the initiating component of the contract and the fundamental ingredient for the extension of legitimate governmental authority. Explicit consent can be represented by the act of applying for citizenship, voting, or simply immigrating into the society. Implicit consent is quite different from explicit consent in that it does not require the initiation of a political action--only that a political community exists. In such a situation, consent is represented by the implicit (or tacit) agreement to follow the laws and rules of the government or by the absence of attempts to exit the "contractual relationship" (through emigration and/or renunciation of citizenship). Once consent is present, both citizen and government are vested with certain obligations, which they must fulfill to maintain the contractual relationship.

OBLIGATIONS OF CITIZENS

Consent enables the contractual relation between the "co-signing" parties. Such contractual relations attach obligations to each party. Within a traditional social contract framework, the co-signatories are limited to two parties: the citizens and the government. Social contract theories have varied widely in how they conceptualize the obligations of citizens. For instance, Hobbes views the citizen's obligations in a rather straightforward manner: It is the duty of any citizen subject to the legitimate authority of the government to follow the commands of that government (Hobbes, 1994; Medina, 1990). Modern conceptions of citizenship itself are very broad and often encompass several dimensions. Theorists have identified two primary dimensions: legal and ethical obligations of citizenship. Legal obligations of citizenship are the rights and obligations that are bestowed on citizens through legal statutes and constitutions. Ethical obligations derive from broader political, social, and economic obligations to the community, which are influenced by community norms, values, and culture (Cooper, 1991). For example, one legal obligation of citizens might be to respect the property rights of others, whereas an ethical obligation can be represented by a community tenant association compelling its members to be concerned with community improvement. Legal obligations of citizens are limited by governmental jurisdiction. Ethical obligations are limited only by the span of influence of the particular community (local, national, or trans-territorial).

OBLIGATIONS OF THE GOVERNMENT

Within the traditional social contract framework, the government is the other co-signatory. Classical contract theories also differ in their treatment of government obligations. For instance, Hobbes's (1994) notion of governmental obligations, in reference to his notion of a social contract, lies in the creation of a powerful government that wields power on behalf of the collective and provides for the people in ways that, acting as individuals, would be difficult or impossible. Essentially, Hobbes believed that the creation of a powerful government was essential for the guarantee of security and would move an imperfect political society toward a near perfect one (Held, 1989). In contrast, Locke (1982) felt that the ultimate purpose of government was to protect the rights of individuals in pursuit of "life, liberty, and estate." The powers to make and enforce …