Fragmentation and coordination in the Scandinavian railway sector
| Date | 01 September 2007 |
| Published date | 01 September 2007 |
| Author | Silvia Olsen |
| DOI | 10.1177/0020852307081146 |
| Subject Matter | Articles |
Review of
Administrative
Sciences
Fragmentation and coordination in the Scandinavian railway
sector
Silvia Olsen
Abstract
New Public Management (NPM) is a package of organizational reforms which
have been implemented in large parts of the world. NPM reforms hold elements
of centralization as well as of fragmentation. This article focuses on the balance
between these elements, providing a comparative perspective by analysing the
railway sector in each of the Scandinavian countries. The empirical basis is docu-
ment analyses and qualitative research interviews. The article has two aims. First,
attention is directed towards understanding the mixture of fragmentation and
coordination in each country. Second, efforts are made to explain differences in
national mixtures. Explanations are derived from four analytical perspectives:
(1) fragmentation and coordination trajectory; (2) path dependency; (3) the punc-
tuated equilibrium metaphor and (4) political orientation. The differences seem to
find their cause in divergent political-administrative traditions, as well as in current
events. No single analytical perspective, however, provides a comprehensive
explanation on all differences observed.
Points for practitioners
Public Administration researchers have often argued that New Public Manage-
ment reforms generally contribute to organizational fragmentation. This study
does, however, show that in the railway sector, there are considerable differences
in how fragmentation and coordination is balanced, even in relatively similar coun-
tries like the Scandinavian ones.
Key words: comparative, coordination, fragmentation, New Public Management,
path dependency, punctuated equilibrium metaphor, reform
Silvia Olsen is a Research Political Scientist, Institute of Transport Economics, Oslo, Norway.
Copyright © 2007 IIAS, SAGE Publications (Los Angeles, London, New Delhi and Singapore)
Vol 73(3):349–364 [DOI:10.1177/0020852307081146]
350 International Review of Administrative Sciences 73(3)
1. Introduction
New Public Management (NPM) is a package of organizational reforms which since
the mid-1980s have been discussed and implemented in large parts of the world
(Hood, 1991). NPM reforms are inspired by a set of economic theories, predomi-
nantly economic organization theory and management theory (Boston et al., 1996).
The first set of theories holds that the power of political leaders must be reinforced
against the bureaucracy, requiring attention to centralization, coordination and con-
trol. The second set of ideas focuses on the need to (re-)establish the primacy of
managerial principles in the bureaucracy. Consequently, the NPM concept is of hybrid
character, balancing centralizing and devolutionary tendencies (Christensen and
Lægreid, 2004). Many authors have, however, argued that NPM reforms have
resulted in a considerable fragmentation of the public sector, increasing problems of
interaction and coordination (O’Sullivan and Patel, 2004).
In this article, attention will be directed towards understanding the balance
between tendencies of fragmentation and coordinative efforts in an NPM-inspired
institutional environment. Tendencies of fragmentation will be studied by means of
vertical reforms, transference of authority downwards in the hierarchy between
different organizational forms; and horizontal reforms, a separation of administrative
functions within the same organization. The concept of coordination will refer to the
(inter)organizational structure, that can be more or less coordinated, and to coordi-
nation as a process among organizations.1 Coordination can take place vertically,
through the hierarchy, i.e. between the ministry and to organizational units under the
ministry; or horizontally, between units at the same organizational level. In this article,
however, focus will be on vertical coordination, through the hierarchy.
The transport sector is one of the sectors that has been considered particularly
suited for NPM reforms like privatization, corporatization and division of large national
transport organizations into smaller single purpose units (Sørensen and Ravlum,
2004). This article is an analysis of the balance between devolutionary tendencies
and coordinative efforts in the railway sector in the Scandinavian countries: Denmark,
Sweden and Norway. In all three countries, the railway sector has experienced exten-
sive NPM-inspired reforms, and the analysis will therefore be concretized by investing
special interest in this particular sector. The aim is to explain why the Scandinavian
countries balance fragmenting NPM reforms and governmental coordination some-
what differently in the railway sector.
Over the past two decades, the railway sector in all three countries has gone
through extensive organizational reforms, apparently inspired by NPM. Increasing
economic efficiency by introducing or strengthening the market mechanism appears
to be the main objective of the reforms. Arguments of role clarity and a clearer
separation of responsibilities have also been raised frequently. In addition, some
reforms are a response to EU policy, requiring a separation of the management of
railway operation and infrastructure from the provision of railway transport services.2
The processes of reform have nevertheless taken somewhat different turns in these
countries. Sweden was generally ahead of the other two countries in implementing
NPM-inspired reforms dividing governmental units, while Denmark was the first
country to convert public sector organizations into state-owned companies. Norway
Olsen Fragmentation and coordination in the Scandinavian railway sector 351
has been characterized as the tortoise; slow but thorough. Governmental coordina-
tion has been stressed to a varying extent in the Scandinavian countries in recent
years. Sweden, previously the most eager NPM reformer, recently published a
Governmental Proposition, arguing for improved governmental coordination within
and between transport systems (Swedish Government, 2006). The Norwegian
government has stopped or reversed NPM reforms in the railway sector. Denmark,
however, on the one hand continues carrying out NPM reforms, while on the other
hand the ministry is practising increased supervision and coordination of units.
The next section includes a presentation of the method and data applied in this
study, as well as a presentation of four analytical perspectives. Section three will be
directed towards understanding what mixture of fragmentation and governmental
coordination each of the Scandinavian countries is approaching. In section four, these
observations and the analytical perspectives will be the point of departure for a
discussion on why the countries approach coordination differently. Section five
concludes and sums up the findings.
2. Approach
Method and data
The Scandinavian countries generally share a somewhat pragmatic and consensus-
oriented approach to the NPM reforms (Christensen and Lægreid, 2002). The
Scandinavian countries also have a relatively similar cultural, historical and institutional
structure.3 As explained above, the countries do nonetheless seem to perceive the
importance of governmental coordination and NPM reforms differently. The most
similar system4 analysis is the natural approach in a comparative study based on
these characteristics.
Using a most similar system approach, then, I aim to explain what independent
variable (i.e. managerial problems) can explain the differences in outcome (organiza-
tion of the railway sector). The analysis focuses on public policy at the national level,
and hence influences from the international level (e.g. the EU) or the regional level
(e.g. city administrations) are not analysed in this study.
The empirical background of this article is a study containing analyses of policy
documents from each of the Scandinavian countries, as well as existing publications,
reports and articles on NPM reforms. In addition, 11 qualitative and critical, semi-
structured research interviews (Fog, 1997) have been carried out, including 12 inter-
viewees. Hence, in one interview two interviewees took part. The interviewees
represent the following organizations in each country: the ministry of transport, the
national rail authority,5 the largest train operator and the rail infrastructure manager.
The interviewees hold positions as deputy permanent secretary (the ministries), chief
executive officer, deputy executive officer, general director, or the equivalent. One
was head of division. The interviews were carried out in autumn 2006. All interviews
were taped and transcribed in their entirety. The individual interviewees have
approved all quotations. Furthermore, all interviewees received a draft article, and
were invited to comment on it.
352 International Review of Administrative Sciences 73(3)
Analytical perspectives
Why do countries approach coordination differently? Several potential explanations
can be derived from different analytical perspectives. In the following, four analytical
perspectives, potentially providing explanatory value, will be presented.
Fragmentation and coordination trajectory
A number of recent studies of NPM
dynamics have concluded that when reforms in the public sector result in increased
specialization and fragmentation, this will eventually lead to a new interest in coordi-
nation (Pollitt, 2003; 6, 2004; Pollitt and Bouckaert, 2004; Bouckaert et al., 2006). More
specifically, organizational measures to reduce fragmentation can imply...
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