progress in economics

Wojtek Sokolowski sokol at jhu.edu
Thu Mar 25 09:48:03 PST 1999


At 10:39 AM 3/24/99 -0800, you wrote:
>
>Thank you for copying me on your message! I am delighted that these
>findings regarding exploration outcomes have prompted discussion here and
>elsewhere.

Thanks for your response. My reply follows.

RE:
>
>Two observations: First, it is indeed true that many government-funded
>expeditions were conducted by the military. But not all. Consider, as
>counter-examples, Richardson (1847), Hall (1871), Nordenskiold (1872),
>Weyprecht (1872), Nansen (1893), Toll' (1900), and Mylius-Erichsen (1906).
>(For examples beyond my sample period, consider also the non-military, but
>government-funded, disasters involving Stefansson in 1913 and Nobile in
>1928.)
>
>Thus, it would be incorrect to label the paper something like "Military
>versus Civilian Initiative in Arctic Exploration..."

Perhaps. But to know for sure if military organisation had any effect, you would need to control for that factor, and I do not find any indication of that in your paper. True, that would probably leave you with too few cases of non-military expeditions on the publicly funded side, but the idea is certainly worth further exploration. See also my remarks below.

RE:
>
>Second, regarding your "spurious causality" argument: You seem to agree
>with the paper's conclusions that government-funded expeditions performed
>poorly, but you add a layer of complexity. You argue that some
>government-initiated endeavors can be "more flexible and less
>authoritarian", while others (those led by the military?) apparently
>cannot.
>
>Thus, you seem to propose an "efficient government" (non-military) versus
>an "inefficient government" (military) story. That certainly is a
>testable hypothesis. Do you have in mind a way to test it?

Actually, military is a proxy for the organisational form and governance which, I susppect, is a culprit here. Charles Perrow (_Complex Organisations_, 1986) distinguishes two dimensions, "coupling" or the tightness of administrative control (or decsion-making autonomy) and the complexity of tasks faced by the organisation and identifies four types of systems:

1 -loosely coupled organisations (i.e. non-hierarchical, delagating authority, substantial decision-making autonomy) facing complex tasks;

2 - tightly coupled organisations (i.e. hierarchical, centralised) facing complex tasks;

3 - loosely coupled organisations facing uniform tasks; and

4 - tightly coupled organisations facing uniform tasks.

It appears from your paper that the relevant types are 1 and 2. That is, what distinguished the privately and publicly funding expeditions is the level of organisational coupling in the face of tasks facing a similar complexity level. The real question we thus face pertains to the selection of the organisational venue (loosley vs. tightly coupled) for the implementation of the arctic exploration programs. But more about that later.

That can generate a testable hypothesis such as:

"In a complex-task environment, everything else being equal, tighly coupled organisations will perfrom less efficiently than loosely coupled organisations."

That can be construed as an alternative to the hypothesis you examine (i.e. that publicly funded organisations will perform less efficiently). Of course, both hypotheses can be tested for main and interaction effects, provided there are sufficient number of cases of tightly and loosely coupled public ventures, as well as tightly and loosely coupled private ventures.

RE:
>
>As for your claim that some government-initiated endeavors can be flexible
>and successful -- absolutely! Think, for example, of Lewis and Clark.
>
>Beyond the level of anecdotes, however, it is useful to examine general
>tendencies. Why, for example, did so many government-initiated
>expeditions perform poorly? Why is public funding frequently not
>"...utilised in a more flexible and less authoritarian manner"? It is
>different to claim that government-funded initiatives *can* perform most
>effectively, than to claim that, in fact, they generally do.

See my comments on the tightly and loosely coupled systems. In general, my hunch is that financing source alone has little, if any, effect on efficiency. Since financing and delivery may or may not be located in the same organisation or even institutional sector, we can certailnly imagine a publicly funded venture being delivered by a private provider. In fact, such arrangements are often found in the nonprofit sector providers that deliver publicly funded services (not to mention arms manufacturers).

I think a more promising direction is the organisational ecology school/ "garbage can" theory of organisational behaviour which argue, in essence, that organisational actors tend to choose the organisational resources that are most readily available - but not necessarily best suited - to solve any particular problem they face. That might, for example, explain why government agencies organising arctic expeditions chose the military as the "program provider."

There is also the question of timing. It is my impression that the governments in the period of time that your paper examines were more likely to choose the "most readily available organisational resource" (i.e. the military) than governments today, which are hard pressed to find alternative venues of service delivery.

To summarise, I think there is much more than the source of financing alone that determines organisational behaviour/outcome. That, I believe, was the main point of my original posting.

RE:
>
>This, I propose, is why it is important to understand the effects of
>different incentives that accompany different organizational structures.
>By doing so, we can get beyond dogmatism and better understand both
>anecdotes and more systematic evidence.

Absolutely. I think your paper raises an interesting issue of the role of financing, even though I may not necessarily agree with all your conclusions. As I said before, I think there is an intervening variable - namely the choice of organisational venue for program delivery - that plays a role. When controlling for that factor, I suspect that source of financing alone has little or no effect on performance/efficiency. I do not moreover think that the choice of delivery venue is predetermined by the funding source (although it might be under certain circumstances, e.g. centrally planned regimes of Eastern Europe). It is therefore, an open empirical question what factors decide about that choice and under what conditions.

That certainly is worth further empirical investigation. One area that can be quite promising is nonprofit service organisations that recieve public support (both support and payment for services), private donations, and service fee income - which allows controls for different types of financing.

Best regards,

Wojtek Sokolowski



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