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Theme-Based Book Review: Business, Government, and Neoliberalism.

Introduction

As a catastrophic event, COVID-19 perhaps did not cause shortcomings in society and in us as a human species as much as reveal them. With COVID-19, the shortcomings involve not only in the human body’s inability to fight off the disease, but in the proclivities of society’s dominant forces within this status quo; in this difficult setting, complicating matters, there has been mistreatment of a startling range of groups and a disturbing inequality in peoples’ ability to make a living for themselves, but then again, such tendencies have been there all along, in some form or another. A locus of discussion in academic literature in seeking after meaning in all of this loss and disruption has been the role of the neoliberal project, specifically its market-led, small-or-no-government thinking, and the interaction between private (business) interests and the public sector in light of recent challenges. We might think of these interactions in terms of public sector outsourcing, but also management of public finances, and regulation of aspects of society where business is involved. It is worth wondering why society functions the way it does, and as hope springs eternal, whether there might be a better way forward.

Neoliberalism appears to be a leading paradigm as long as it suits those in power, in both government and business. A principal problem is that business is often simply unable to extricate itself from the messes it causes; one need look no further than the 2007–2008 economic crisis, which had a great deal to do with overcrediting, lax regulatory involvement, and greed, to find evidence of this. For its part, government has been far too slipshod in playing its proper role of regulating, providing real oversight and bringing fairness to markets, and insisting on fair play where not only elites benefit. Government administrators as a separate matter are typically expected to do more with less (or nothing) – operating from a position of austerity. When crisis ensues, plenty of excuses materialize to bin neoliberalism, at least temporarily, and return to a position where government can save business from itself and return all concerned to a status quo. When crisis is overcome, government can go back to being scolded for costing too much (Davies & Gane, 2021) – a seemingly comfortable position for both business and politics.

The status quo has plenty wrong with it, with those that can ill afford it usually paying the most in crisis situations; those that cause the most harm, through risky, self-centered, even corrupt behavior, may not see any consequences for their actions. For both robust markets and resilience in the face of crisis, a solid public sector needed, and rampant cuts to the public sector have a weakening effect – the damage from these choices was seen in the COVID-19 response (Arrieta, 2022; de Beer & Keune, 2022) and continues to be felt to the present.

In recent years, neoliberalism has been complicated by various populist permutations (Davies & Gane, 2021) that combine a hatred of government with running up a massive government tab to reduce elites’ already miniscule tax bills. Alarmingly, authoritarian populism remains on the rise in the U.S. and elsewhere (Box, 2021). In another view, policy spaces are taken up by private sector preferences and actors that perhaps had a hand in causing certain problems, leading to a patchwork approach lacking strategic direction, and perhaps even leading government to do less with more (Berry, 2022).

If the market has the answers to public problems, as neoliberalism would have it, why does business so often come to the government with its hand out, looking for help? Business, too, knows that crises and emergencies are coming – why doesn’t business plan for them? Business and government can work together, but can it be assumed that business will consider the public good when its accountability is to its shareholders, and government’s accountability should be to the whole of society? Is it even reasonable to conclude that the two can be made to square with one another, for very long if at all?

Public servants work in challenging if not impossible environments and develop imaginaries as a bulwark against neoliberal expectations as a means of survival; they have to decide what is protected about public organizations and what they do, and what is to be cast-off. The framing of what is possible and what is not is increasingly hemmed by the selections that have already been made, and the austerity of budget choices (Orr & Bennett, 2021). Pandemics do not make choices or government processes easier, and competing priorities and expectations, too, heighten the differences that already exist from various perspectives, making the development of supportive relationships between business and government more difficult. Recent texts have dealt with the issues above, and a host of related matters, in trying to make sense of the interactions of business and government.

This theme-based book review considers four recent titles related to the intersection of business and government: Outsourcing in the UK: Politics, Practices and Outcomes, by Janice Morphet; Public Financial Management in the European Union: Public Finance and Global Crises, by Marta Postula; Handbook of Business and Public Policy, edited by Aynsley Kellow, Tony Porter, and Karsten Ronit; and European Public Procurement: Commentary on Directive 2014/24/EU, edited by Roberto Caranta and Albert Sanchez-Graells.

Janice Morphet.(2021).Outsourcing in the UK: Policies, Practices and Outcomes. Bristol University Press.258 pp. ISBN 978-1529209600 (hbk, GBP 85.00); ISBN 978-1529209624 (epub, GBP 29.99).

In Outsourcing in the UK, Janice Morphet (2021) examines how outsourcing rose to prominence for public service provision since 1980, with privatization as a means of relaxing regulatory standards. The book also considers the role of neoliberalism in shaping the current, occasionally miserable, state of affairs, in which government has frequently proven itself decidedly ill-equipped to handle the stress of increasing complexities, such as that posed by COVID-19. Morphet offers the idea that “statecraft has used a succession of metanarratives to drive institutional reform in government based on the agreement to implement public sector liberalisation…[including] the need to save money…efficiency…effectiveness…performance management…and as austerity” (2021, p. 8). Rather than taking these narratives at face value, the narratives are instead seen for their “performative and presentational role that distracts people from the lack of change between two governments of different parties” (2021, p. 9). While outsourcing allows a government to contract a service, in the public’s mind the responsibility will always remain with the government. Outsourcing, possibly a choice to help agencies focus on the business, might instead become a way of losing sight of the business, the agency clients, and the mission.

After a succinct, readerly introductory chapter that on its own serves as a high-quality primer on the topic, the book delves further into a variety of applications of outsourcing, including its legal basis, competition in the utilities sector, competition in local government, health services, education, and voluntary civil society/social enterprise organizations.

The book does a commendable job of familiarizing the reader with the unique background of the UK case; this is notably so through the legal basis chapter. The chapter on competition in utilities bears out some of what readers may have already thought about privatization – that it does not necessary equate to greater efficiency, contracts have been too munificent to the supplier, and performance experienced has in some cases been poor enough for the government to take back the contract. As chapter four notes, though, the public was nevertheless readied for an environment of even more privatization by public sector budgets that had been undermined for a period of 11 years under Thatcher. Sometimes with public agencies, what is needed is capacity building, and not simply the movement of money from public into private hands. There is no magical tenet that indicates success just because the private sector is handling a process. Suggestions elsewhere in chapter four that public procurement was inefficient provide a familiar refrain to anyone that has studied or worked in that field; there are good reasons for supposed inefficiency, and delays may be by design, but those reasons may not be apparent or even matter to the public, business, or politicians.

The book raises intensely relevant points, because the legitimacy of the public sector enterprise is connected to its delivery of service to the public. There are opportunities, as Morphet points out, to work toward improving confidence in public institutions, but there has to be a desire to rectify what are obvious shortfalls. Along the way, some of the cases resonated with me because I have used similar cases in my own classes. Private sector prisons, for example, have proven a source of discussion and disagreement in the U.S. and it is clear from the discussion in chapter seven, on outsourcing central government services, that promised cost savings were also not seen over time, along with issues of accountability similar to the U.S. case.

I enjoyed reading the case about university privatization, having worked with both public and private universities; I found the account balanced and fair. Morphet points out in the conclusion that government has, in its outsourcing program, lost capacity in responding to crises, let alone in managing outsourced contracts, and that this has led to reduced outcomes and not necessarily at better prices. None of this is necessarily surprising but the point is that the story of outsourcing is told with due regard to the consequences of decisions and how this might ultimately place the public interest at a disadvantage, if compared to other options that were formerly available and have been foreclosed as a result of incremental decision making and a well-worn unquestioning adherence to neoliberal thinking.

The book as a whole provides a coherent exploration of the topic and case, with little weakness overall. I enjoyed this book and recommend it for scholars interested in this topic generally and in the UK case specifically. The book might be useful in the classroom environment, for a course on public finance and budgeting in the UK; from the perspective of student readers, the book maintains interest throughout – a definite point in favor.

Marta Postula.(2022).Public Financial Management in the European Union: Public Finance and Global Crises.Routledge. 252 pp. ISBN 9781032118901 (hbk, US $160); ISBN 9781003222033 (ebook, US $48.95).

Marta Postula’s book, Public Financial Management in the European Union, examines public policy implementation at the EU and national levels, based on strategy documents and alignment or misalignment in expenditures with the Community’s goals. The book provides a fairly comprehensive examination of economic policy harmonization by considering expenditures and then effect in terms of outcomes in policy quality.

The first chapter highlights the predicament that resulted from the 2007–2008 financial crisis, and caused many scholars (and apparently far fewer policy-makers and business people, which is too bad for all of us) to rethink their seemingly absolute belief in rational investors and efficient markets. From the theory standpoint, there is clearly a need for government involvement in regulating markets, especially when the worst of investor behaviors form into a dense thicket that threatens to bring down entire economies. As above, neoliberalism is implicated in its role in helping to amplify the potential for crisis. Postula’s arguments make sense in many respects, especially where there is questioning of the right role of government to intervene to protect the public interest, compared with the desires of business interests to have less intervention. The pandemic is also mentioned as an example of where crisis and scale of a problem quickly moved beyond individual nations’ abilities to properly handle concerns. Postula reminds readers of the importance of financial management based on transparent, sound terms, ready to meet the challenges of the day. Keynesian approaches of monetary flows to address the pandemic offer a quick response, but they treat symptoms rather than diseases of the economic system, which elites have little interest in treating when there is so much money to be made. COVID-19 has not yet led, and probably will not lead, to large scale, sustainable changes in how economies function, and in the EU, how nations work together to agree on policies to support public services, but it remains that no single country can address all of these issues for the whole of the EU – it will take cooperation and collaboration (Postula 2022).

Responding to the 2007–2008 financial crisis, the EU developed regulations that seem effective at the supranational level, but it is necessary to question whether the effectiveness continues to the Member State level; this is the focus of chapter two. Member States must support the union and have little latitude to devise their own economic policies. If the EU wants to support a long-run goal like sustainable development, for example, it must support state-level stability and solvency. Inadequate planning at the state level creates instability that extends beyond state borders into the supranational level. Governments do well to engage in reforms during good times, so that systems will be more resilient to shocks when challenges arise. Evaluation of state-level systems is made difficult by the absence of universally accepted models of quality. Fiscal rules form a bedrock for activity in a larger respect, though, and consistent application and forms a context of stability for business, but also perhaps acts as a means of constraint on untoward behavior. The problem is that governments try to strengthen rules, find them insufficient, and turn to other approaches (and third parties, such as independent fiscal institutions). Having some kind of independent fiscal group is mostly the dominant model.

Chapter three continues this evaluation of effectiveness, finding that forecasts offered differ significantly from actuality in medium-term forecasting; some of this has to do with required formatting, some of it with lack of universally applicable fiscal anchors. Importantly, efforts that would benefit stability are dependent on regulatory tools and resources allotted at the state level. Chapter four continues the study of expenditures and debt instruments in response to developing crises. As good as the EU often is at evaluating programs at the supranational level, Postula’s work shows the difficulty that may occur in connecting review reports to the real substantive change that must occur to solve problems. Activities have only slight prospects for achievement, if any prospect at all, perhaps because implementation paths and requirements, connecting expenditure to outcomes, are simply too complex in practice.

Chapter five offers a simplified way of seeing tasks as domestic, EU-level, and global; this is particularly useful in context of crises like COVID-19, and the figures included brought a welcome visual representation. When activities can be conducted at the domestic level, they should be (for example, in poverty alleviation) and the chapter explains why, for the best, most effective use of public funds. This chapter is perhaps the book’s strongest contribution, though there is much to appreciate about the careful analysis and detailed discussion of the EU’s approaches, vis-à-vis the implementation seen in the Member States, and prospects for the future with the potential for further crises on the horizon. If the book has a weak point, it is in the conclusion, which at times did not wrap up the work as a whole as well as it could have.

This is a minor point given the strength of the bulk of the book, which will be of interest to scholars and practitioners working in EU financial management study, and possibly as reading for a class on this or related topics.

Aynsley Kellow, Tony Porter, and Karsten Ronit (eds.).(2021).Handbook of Business and Public Policy.Edward Elgar. 416 pp. ISBN 9781788979115 (hbk, US $220); ISBN 9781788979122 (ebook, US $65).

Related to neoliberalism, globalization has changed the way governments and businesses see and manage their expectations of one another. Handbook of Business and Public Policy, with its foundation in an International Political Science Association research committee, has as its project a scoping of business and public policy topics, with varied applications. The introductory chapter by the book’s editor team (Kellow et al. 2021) identifies general trends since World War II in the literature on interactions between politics, government, and business, and how the entities shape and are shaped by one another. Major thinkers such as Truman, Dahl, Mills, Lowi, and Schattschneider figure in the discussion, leading to more recent periods characterized by growth in civil society organizations, the previously mentioned globalization (and notions of self-regulation), and what might become the future of business and government interaction.

The handbook features 21 content chapters on a variety of topics that have intersections with the business world, including consumer policy, trade policy, tax policy, monetary policy, science and technology policy, migration policy, the corporate welfare state, and industrial policy, Chapters on agriculture policy, environmental policy, financial regulation, and tourism round out the book’s offerings.

I found the chapter, by Fuchs and Lennartz (2021) on corporations in governance, and preferences for hard or soft regulation – interesting, though it could be noted that plenty of so-called hard regulation has been undone by a lack (purposeful or through omission) of enforcement. Government does not want to cross, or at least be seen as crossing, business, as it is a bad political look, so businesses often receive favored approaches, such as voluntary, flexible approaches instead of hard regulations. While favored, these lighter approaches may not work as well, but they have the virtue of keeping business/government relations in a positive tone. Ronit’s chapter on consumer policy (2021) is a capable introduction to the topic, pointing out the inconsistencies that may exist not only in business practices, but in initiatives like corporate social responsibility. The chapter by Emmenegger & Unterweger (2021) on training policy is of interest not only because of the topic’s centrality in state-sponsored initiatives related to economic development, but also for the policy as a response to the demands of neoliberalism, where clearly the market is not taking care of matters on its own and leaving, if not for state intervention, many behind. Hilgers’s chapter (2021) on monetary policy is accessible, allowing an opportunity for the reader to consider how such policy might not be as independent as one might hope, and how business power wields considerable influence, even with efforts at transparency on the part of central banks.

From the perspective of the theme raised at the outset of this essay, Farnsworth’s chapter  (2021) on the corporate welfare state perhaps deals most directly with the dependence of business on government. If one is of the opinion that businesses (and corporations as people, since they have rights like people in the eyes of the law in the United States, see for example Citizens United, Appellant v. Federal Election Commission, 558 U.S. 310 (2010)) should be allowed to fail, just as people are allowed to fail all the time, and that businesses should not necessarily receive or even expect a constant flow of sweetheart deals, businesses might toughen up, learn, and make fewer silly mistakes with other peoples’ (read: taxpayer) money. A problem is inconsistency and wanting to have cake and eat it.

Business depends on government largesse just as people do when it comes to infrastructure, as well; business, in need of infrastructure and having the ability to provide it, does not, showing the limitations of private-sector provision of public goods. The forces of globalization and neoliberalism have intensified stresses, but they have not fundamentally changed basic aspects: public money for private gain remains a serious concern. Other chapters are serviceable and provide straightforward introductions to topic areas. I would have appreciated more detail and critique in some areas, such as in food and agriculture, where the treatment was a gloss in my view on industries where short-run private considerations sometimes outweigh long-run public obligations; again, these are handbook chapters and the treatment is within the scope of the work as a whole.

The book does not offer a conclusion chapter, which may have been helpful to round out the collected chapters, identifying common threads in theory and practice and making recommendations for future research. Another point that may have been helpful to readers would have been to have some sort of organization to the chapter order. The collection has good, occasionally very good and even great, chapters on useful topics, but the reader is perhaps less likely to undertake a complete read of the text as a whole without helpful signposts for the ordering of material and the thinking behind the book’s organization.

Still, the Elgar handbook series is generally well done where it touches on public administration and public policy, and this book is no exception. Libraries, especially those that support business school programs with an interest in public policy interactions, may have an interest in adding this to their collections, and scholars working on topics touched on by the chapters may also want to seek out this book for general insight into major topics and related areas.

Roberto Caranta and Albert Sanchez-Graells (editors). European Public Procurement: Commentary on Directive 2014/24/EU. Edward Elgar. 1040 pp. ISBN 9781789900675 (hbk, US $395); ISBN 9781789900682 (ebook, US $316).

Directive 2014/24 (2014/24/EU) centers on rules for public contracting within the EU, requiring transparency, equal treatment, and economically advantageous award on a best-quality ratio basis, considering a variety of factors including quality and cost-effectiveness, environmental factors, and social programs, among other considerations. The directive asserts the innovative potential of small businesses and outlines protections for workers’ rights. Interestingly, from the perspective of outsourcing, the EU thought it appropriate to include language noting that nothing in the directive obliges outsourcing of activities that might be provided by government. The document (a 178-page pdf) is dense and like most legal documents is subject to interpretation beyond a plain reading of the words on the page (European Union, 2014). It is particularly useful to have a strong understanding of relevant case law, given legal texts like this.

European Public Procurement: Commentary on Directive 2014/24/EU, edited by Roberto Caranta and Albert Sanchez-Graells, is an essential companion to the directive. Bringing together a brilliant team of experts on EU public procurement law, this commentary is rich with perspective on the directive, what brought the EU to construct its language as it has, and what to make of the rules and the policy thinking behind them. The book is a benefit to those seeking to fully understand the EU’s policy and practice where public procurement is concerned. This is a striking, substantial contribution to scholarship where procurement law, beyond simply EU procurement law, is concerned. I have personally been interested in legal texts and interpretations in the context of signs and objects, and how it is possible for the practical application (the life of a rule) to become increasingly alienated from its text, original intent, or the political/rhetorical purpose (Atkinson, 2019). Simply, laws and rules cannot always be taken at their word without understanding context. This commentary was naturally of great interest to me and I would suggest it would be to others of like mind.

Over the course of its chapters, the commentary reveals a great deal about procurement law generally, which is of interest to scholars beyond the EU. Choices are made in construction of procurement law, such as in establishment of thresholds where rules become applicable, the nature of exclusions, the nature of what constitutes conflict of interest for the EU and across member states, requirements for competition, and the like, where what is included and why is potentially as important as what is not included. Government, as institutions charged with making and keeping the ‘rules of the game’ (North, 1990), might seek to be transparent about the choices being made; yet, it is entirely possible that without adequate explanation appropriate to different audiences, these choices are at best unclear, or at worst, arbitrary and beneficial to limited interests. It is therefore of great importance that understanding is maximized through thorough discussion that brings clarity to what may otherwise be muddy issuances of government-speak. The fact remains that to bring clarity to a policy statement and bill of legal requirements like the directive, a suitable legal commentary is upwards of 1000 pages. If there is a need to demonstrate how public procurement becomes unapproachable for would-be public sector vendors, despite the protestations of government to be more open to small vendors, this is perhaps such a demonstration, as the readership from the business community for this book would perhaps be very small; one wonders how many vendors read and fully understand EU directives.

The book’s authors work well in this arguably dysfunctional context, but the result is a reference collection that is immediately useful and fascinating. This commentary provides a wealth of understanding to anyone that might seek it out, and one hopes that those with work involving EU public procurement will seek it out as a reference. It would be a highly appropriate addition for library collections in support of scholars and public procurement programs in this area.

Synthesis

The books in this review all deal in some way with the at-times difficult, tense intersection between business and government, which is unstable due to forces within and beyond the control of both parties. Government regulations and aspirations to reign in the more self-serving aspects of business meet and must come to terms with the expectations and power of the business community; such interaction is informed by the long shadow of narratives like neoliberalism that serve an important purpose in the political context, even if they tend to fall flat in the face of crises. What might be said for all the books here is that the usual explanations – the tried-and-true approaches that have served the public and private sectors for so long in providing for some semblance of stability – do not always work, or work as well as they once did. Efforts to evaluate and provide for transparency, to give the government enterprise the legitimacy it desperately needs in an age of distrust, may lead to the realization that the right questions are not being asked, and thus the wrong information is being obtained, if any information of consequence is being obtained at all.

What is dangerous is the potential that rhetorical flourish might continue fly free, speaking to the best of humanity in highly idealized ways, while administrative apparatus is left hollowed-out and under-resourced, unclear on how to engage in meeting legislative intent, and unable to overcome what are clear differences among, for example, member states within a union. This fails to manage expectations, and possibly on purpose. As leadership potentially becomes more opportunistic, there is potential for bad actors to take advantage of administrators’ best efforts to get program implementation right, and instead show failure as a reason to centralize yet more power, disregarding original program intent entirely. Benefits to citizens remain unrealized, but political machines may not notice, much less care, if not themselves called to account. Powerful people do not like to be questioned, but then again, these are difficult times, and there is plenty of discomfort to go around. Where inconsistency exists, there remains the potential for resolution and improvement. However, going along with standard retorts about the infallibility of the market economy, and other often unquestioned neoliberal absurdities, when the market has shown itself to be incompetent if not dangerous on a number of occasions, could amount to regulatory nonfeasance, if not madness.

The market may be the best way and business is essential, but as has been pointedly demonstrated through recent crises, a strong government role is not now and was never optional; government’s role to play is also indispensable. The four books reviewed here reveal this.