A Gattopardo’s approach to reforms: from PA to NPM and back. The case of the Italian Central Government1

By

Mariannunziata Liguori

Queen’s University, Belfast, UK

Silvia Rota

Bergamo University, Bergamo, Italy

Ileana Steccolini

Bocconi University, Milan, Italy

Ileana.steccolini@sdabocconi.it

Paper presented at the 13th CIGAR conference in Gent, Belgium, 2011.

1 Il Gattopardo (i.e. the Leopard) is the novel written by Giuseppe Tomasi di Lampedusa that chronicles the society’ changes happening in Sicily during the IX century (the so called Risorgimento). The novel became famous for one of the author’s quotes ‘They will foist a republic on us. If we want things to stay as they are, things will have to change’.

Abstract

The supposed shift from a Public Administration (PA) to a New Public Management (NPM)

model, and recently, to a Public Governance (GOV) one, has been the subject of intense

academic curiosity over the last decades. While many have debated NPM and GOV

developments, less attention has been paid to study how reforms are put forth through the

development of ‘discourses of modernization’. This paper contributes to current debates by

exploring whether and how NPM and GOV ideas replaced, supplemented or integrated

traditional PA ones. It investigates, through discourse analysis, Italian Central Government’s

accounting reforms over the last 22 years. The results suggest that NPM and GOV, far from

being revolutionary paradigms, can be described as fashionable trends that don’t leave

significant traces in the practice and rhetoric of reforms. A ‘neo-Tocquevillian’ paradox

exists, not only at the organizational level, but also at the discussion level, before reforms

come into action.

Keywords: accounting reforms, discourse analysis, new public management, public governance

A Gattopardo’s approach to reforms: from PA to NPM and back. The case of the Italian Central Government

Introduction

The (supposed) shift from a Public Administration (PA) to a New Public Management

(NPM) model (and more recently, to a Public Governance – GOV- one) has been the subject

of intense academic curiosity over the last three decades (Osborne 2010). The NPM discourse

has dominated public sector reform ideas internationally during the Nineties and the

beginning of the XXI century, although taking on different nuances in different countries. An

increasing body of literature has described the contents of reforms, identified common trends

or differences, and pointed out the contextual factors that may have influenced both

divergences and convergences (Hood 1995, 1998; Barzelay 2001; Kickert 2008; Pollit and

Bouckaert 2011).

Although NPM-type reforms have been incessantly put forward over the last decades and

supported by both policy-makers and academics (Lapsley 2009), the initial enthusiasm has

gradually declined over time (Hood and Peters 2004; Dunleavy et al. 2005; Lapsley 2008,

2009). Some authors have argued that NPM is dead, while others still see it as the

predominant paradigm available (Brunsson and Olsen 1993; Ferlie et al 2001; Pollit 2006;

Lapsley 2008; Osborne 2010). Some have questioned what its replacement might be

(Brunsson and Olsen 1993; Ferlie et al. 2001; Pollit 2006; Lapsley 2008), others have

proposed New Public Governance (GOV) as its natural successor (Osborne 2010), whereas

only a limited number of studies, especially focusing on Germany and Italy, have pointed out

that PA ideas and systems have yet to be replaced (Kickert 2005; Kuhlmann 2010) and that

we are actually witnessing the resurgence of neo-Weberian States (Bouckaert 2006; Pollit and

Bouckaert 2011)

While a lot of attention has been devoted to debate NPM and GOV developments, with still

conflicting results, less attention has been paid to study how reforms have been put forth in

the various countries through the development of different discourses of modernization

(Friedland and Alford 1991; Scott 1995; Meyer and Hammerschmid 2006; Lounsbury 2008)

and how discourses on PA, NPM and GOV relate to each other.

This paper aims to contribute to current debates by exploring whether and how NPM and

GOV ideas replaced, supplemented or integrated traditional PA ones. In order to do so, we

take into consideration the case of the Italian Central Government and investigate through the

discourse analysis technique a particular type of reforms, those in accounting systems, as they

took place over the last 22 years. Accounting reforms represent a particularly suitable area of

investigation since they played a central role in the modernization agenda and have often

been used to translate new values, ideas and beliefs into practice (Hood 1991, 1995; Olson et

al. 1998; Lapsley 1999). Italy is also a relevant context to be studied, since it has been often

identified as a typical example of civil law/Napoleonic country as well as a slow adopter of

NPM reforms. It thus represents an interesting context to gain a better understanding of the

development and blending of PA, NPM and PG discourses over time.

Our results suggest that, at least in the context under analysis, NPM and GOV, far from being

new revolutionary paradigms, can be described as (more or less) fashionable trends that do

not leave a significant trace both in the practice and in the rhetoric of reforms. Moreover, we

show the existence of a ‘neo-Tocquevillian’ paradox (Hood and Peters 2004), not only at the

organizational level, during implementation, but also at the discussion level, even before

reforms come into action.

The following Section reviews the relevant literature and the research question. Section three

describes the methods of analysis. Section four describes the context of the analysis and

presents the results, which are further discussed in Section five. Finally, Section six draws

some conclusions and proposes new research avenues.

From PA to NPM and GOV: literature review and purpose of the paper

Since the Seventies many Governments have engaged in reform processes aimed at bringing

business concepts, techniques and values into the public sector as a basis for improving

public-sector practices (Pollitt and Bouckaert 2011).

PA has been considered the predominant paradigm in the public sector from the late XIX

century to the early Eighties (Wilson 1887; Weber 1922; Behn 1998, Osborne 2010). In the

PA model the administrative action is legitimized and regulated by formal procedures and

norms; organizations are hierarchical; bureaucracy has a central role in making and

implementing policy; politics and administration are separated, and professionals have

supremacy in organizing public service delivery (Hood 1991). In budgeting and accounting

systems, the central role is played by the budget, which is the basis for the political

negotiation and the allocation of resources among different political programs and purposes

(Wildavsky 1964) as well as for the comparison between actual and estimated expenditure.

The ‘neutral’ language of expenditure is the common means of communication between

politicians and bureaucrats (Liguori et al. 2012).

PA dominated the scene until the Eighties, when managerial and market principles inexorably

started to seep into the public sector, gradually becoming the basis and inspiring source for

NPM (Hood 1991, 1995; Humphrey et al. 1993; Dunleavy and Hood 1994; Hughes 1994;

Ferlie et al. 1996; Van Helden, 1998; Olson et al. 1998; Pollit and Bouckaert 2004; Skelcher

et al. 2005). This latter has been presented as ‘the rise of a global social movement with

considerable force’ (Meyer 1998, p. 7) and a quasi-global paradigm superseding the

traditional ‘old’ PA logic (Hood 1991; Dunleavy and Hood 1994;). NPM () with an emphasis

on accountability, autonomy of managers and public organizations, efficiency, effectiveness,

economy, value for money, output- and market- orientation, decentralization, and

performance measurement and management. Given this emphasis, accruals accounting and

budgeting, cost accounting, output-based budgeting, all become central in the implementation

of the NPM agenda (Skelcher et al. 2005; Liguori et al. 2012).

In the transition from PA to NPM, a number of side-effects and unexpected results have been

highlighted (Lapsley 1999, 2008, 2009). For example, Hood and Peters (2004) identify,

among others, three major paradoxes. First, the ‘production paradox’: NPM has required

more intensive specification of outputs and indicators to make results more observable

(Gregory 1995), unintentionally promoting isomorphism and conformity rather than radical

innovations. Second, the ‘managerial paradox’, whereby the intent to improve public service

quality by ‘depoliticizing’ public management has often produced an increased politicization

of managers (Hood 1998; Maor 1999;). Finally, the ‘neo-Tocquevillian’ paradox: public

management reforms, indeed, were meant to replace rule-based and process-driven routines

with a bigger emphasis on results, but in many cases bureaucratic controls have been retained

and incremented through an increase in formalism and regulation (Pollitt et al. 1999).

Many scholars have increasingly pointed out that not everywhere has a shift from the ‘old’

PA to the ‘new’ NPM taken place. For example, in some Continental European countries,

such as France, Germany and Italy (Capano 2003; Kuhlmann 2010; Ongaro 2011), a

comprehensive ‘paradigm shift’ from Weberian bureaucracy to NPM-inspired administration

has not occurred. Instead, we would be witnessing ‘a somewhat ambiguous mixture of new

managerial instruments and traditional legalist practices’ (Kuhlman 2010, p. 1128). This

unexpected reform outcome is also identified with the raise of a neo-Weberian model, where

classical Weberian elements and new NPM-related features are mixed and configure a

Continental European version of the managerial reforms (Bouckaert 2006; Kuhlmann 2010).

This neo-Weberian model of State features a rediscovery of rules and legal principles, where

business-like methods have a role, but the State, with its own rules, methods and culture,

remains the key actor (Pollitt and Bouckaert 2011). In this debate, an intermediate position is

expressed by Fattore et al. (2012), who, specifically looking at the Italian case, see NPM to

coexist with other ideas.

A dissenting voice is more recently represented by Osborne’s (2006, 2010) argument that

NPM has only been a transitory stage in the evolution from PA to GOV. According to this

view, as a reaction to the NPM arrangements, seen as unable ‘to capture the complex reality

of the design, delivery and management of public services in the twenty-first century’

(Osborne 2010, p. 5), there has recently been a new call for a more sophisticated

understanding of the implementation of public policies and the delivery of public services.

GOV-related ideas have thus been introduced, where the focus shifts to the necessary

existence of both a plural State (where multiple interdependent actors contribute to the

delivery of public services) and a pluralist State (considering multiple processes to inform

policy-making – Marsh and Rhodes 1992; Börzel 1997; Frederickson 1999; Klijn and

Koppenjan 2000; Lynn and Heinrich 2001; Salamon 2002; Milward and Provan 2003; Peters

2008). By acknowledging an increasingly fragmented and uncertain nature of public

management, GOV focuses on inter-actors relationships with an emphasis on trust control

mechanisms and service processes and outcomes. Hence, the focus of accounting techniques

should move increasingly towards the reassurance of social efficiency and effectiveness (i.e.

citizens’ needs satisfaction and indicators of policy outputs and outcomes), as well as

participation and involvement of stakeholders in budgeting and reporting.

The above discussion highlights how there is no agreement on the extent of the actual

replacement of PA ideas with NPM (and GOV) ones, nor on whether the latter merely

represent a transitory set of tools and techniques. The contributions discussing NPM and

GOV tend, on the one hand, to describe their main characteristics , and on the other, to

identify (theoretically and empirically) their positive and negative effects. Those authors who

downplay the role of NPM and GOV ideas in public-sector reforms, instead, tend to adopt a

descriptive and comparative approach, laying their analysis on the ground of historical

explanations. We contribute to this debate by exploring whether and how NPM and GOV

ideas replaced, supplemented or integrated traditional PA ones. To this end, we look at how

these three systems of ideas, seen as different discourses of modernization, were incorporated

in the parliamentary discussions leading to the approval of reforms and regulations. The

research adopts an alternative methodological approach, discourse analysis, which has been

scantly used in the study of public-sector reforms (for an exception, see McGrath 2009). This

technique can be particularly useful to highlight ideas and arguments present in the political

discussion and also allows to overcome the well-know limitations of the mere content

analysis (Fattore et al. 2012).

Methods

When reforms are decided, the way in which their pros and cons are discussed, the rhetoric

and accounts used to promote or oppose them, and the specific perspectives actors assume,

can be linked to a predominant discourse (Fairlough 1992; Fisher 1995, 2003; Hajer 1995,

2003; Skelcher et al. 2005), i.e., the way in which individuals explain themselves and their

actions. It underlies mechanisms of control and coordination, frameworks for building and

maintaining order within and across a certain system (Morgan and Sturdy 2000, p. 18).

Public-sector accounting reforms can also be studied in terms of the underlying arguments

put forth in order to implement the change and PA, NPM and GOV can thus be seen as three

different discourses. The aim of our analysis is to investigate whether and how NPM and

GOV ideas replaced, supplemented and integrated traditional PA discourse. This study, in

particular, focuses on accounting as an important case of public-sector reforms. Budgeting

and accounting systems and ideas, indeed, embody and reflect the specific features and

principles governing public organisations and have generally been recognised as playing a

major role in the recent waves of reform (Hood, 1991; Olson et al., 1998).

In order to answer the research question, we take into consideration the case of the Italian

Central Government. We analysed all the relevant documents covering the period from 1988

(when an important reform of the State budgeting and accounting system was passed) up to

2010 (when the most recent reforms were approved). Italy has usually been considered a

laggard in of NPM-style changes (Hood 1991, 1995; Capano 2003; Pollitt and Bouckaert

2004; Ongaro 2011; Fattore et al. 2012). Moreover, being a civil-law country, Italy has

always relied on laws and administrative acts to adopt new reforms (Panozzo 1998). It thus

constitutes an interesting case of analysis of how a traditionally PA-oriented country can

struggle to introduce new managerial tools and reforms.

The documents analysed for the study were collected from the institutional websites of the

two parliamentary chambers. We analysed the laws, the commentaries to the laws (called

‘Circolare’) and the Legislative Decrees issued by the Government in order to implement the

laws. In addition, for each law (4 over the 22 years considered), we coded all the discussion

transcripts of the two Chambers and the related Committees, for a total of 40 documents.

Following a textual analysis approach (Fairclough 2003), the official documents and

transcripts concerning changes in accounting systems were coded to understand what

discourses and arguments shaped the reforms and how. PA, NPM and GOV discourses were

initially identified drawing on existing literature, where their characteristics are discussed

(Marsh and Rhodes 1992; Dunleavy and Hood 1994; Hughes 1994; Osborne 2001; Pollit and

Bouckaert 2004; Meyer and Hammerschmid 2006; Liguori 2010; Liguori and Steccolini

2012). For each of the discourses two possible codes were defined: in favour or against,

respectively coded as PA/NPM/GOV 1 and PA/NPM/GOV 2. Consequently, always drawing

on the relevant literature, a list of indicative keywords and cues was identified and agreed for

each discourse as shown in the Appendix.

As unit of analysis we adopted the paragraph, which represents ‘a collection of meaningful

sentences’ (Guthrie et al. 2003, p. 10). The keywords were initially used to identify the

relevant paragraphs to be coded. Each paragraph containing one or more keywords was then

read in length in order to assign the proper code (for each paragraph multiple codes were

allowed). The researchers assessed whether the keyword related to a certain discourse was

actually used to support or against the discourse arguments. For instance:

‘The approval of the budgeted revenues, the detailed and total budgeted expenditures and the

overall summary has to happen through specific paragraphs in the law draft, referring to

both commitments and cash’ (Law 362, 1988). Keywords: expenditures, commitments, cash.

Code: PA1

‘The Law number 94, April 3 1997 has the aim to place the Central Government’s budget

reform in the broader wave of modernization and rationalization of the public sector and of

simplification of administrative procedures’ (Circolare 32, 1999, commentary to the Law 94,

1997). Keyword: (simplification of) procedures, Code: PA2.

‘We thus create the Authority responsible for Public Accounts Transparency, which operates

in full autonomy and independence with the task of supporting and preserve public finance

transparency and quality of information’ (Transcript from the Senate’s Committee discussion

on Law 196, 2009, 26th May 2009), Keyword: responsible, autonomy, independence, Code:

NPM1; transparency, GOV1.

After the first round of coding, the main reform documents were read again in length in order

to make sure that discourse cues and expressions with similar meaning were considered as

well.

FIGURE 1 shows the evolution of the three discourses and the related paragraph cues from

1988 to 2010. The number of counts shown has been normalised by the number of relevant

documents issued each year, as reported in TABLE 1. TABLE 1 also summarizes the

discourse occurrences per year as a percentage of the total. Finally, TABLE 2 shows the co-

occurrences of the discourse cues, normalized by the number of documents per year.

Insert FIGURE 1 here

Insert TABLE 1 here

Insert TABLE 2 here

The main problem common to all textual analysis approaches is the need of demonstrating

the reliability of the tools used to collect and codify data and the consequent validity and

replicability of inferences drawn from them (Milne and Adler 1999; Krippendorff 1980,

pp.130-2). To ensure reliability well specified decision categories and rules were defined,

multiple coders were used and discrepancies between the coders were re-examined. The data

analysis tool used in this research was Atlas.ti.6. It allowed researchers to assign, share and

update cues simultaneously, as well as assign multiple codes to the same paragraph creating

networks of analysis and tables of correlations across them..

Context and data analysis

In Italy Central Government budgeting, accounting and reporting have been traditionally cash

and commitment-based2. Their main purpose was to ensure budgetary compliance and

2 Cash- based accounting records cash inflows and outflows. Similarly, cash-based budgets show cash inflows and outflows appropriated for the following financial year, and cash- based reports contain actual cash inflows and outflows. Commitment-based accounting records expenditures when the government is ‘committed’ to them, i.e., when the legal obligation to a future cash outflow arises. Commitment-based budgets, when

control expenditure, where the budget documents had to be approved by the Parliament and

consisted of the annual budget, the three-year budget, and the financial law3.

One of the major central government accounting reforms was carried out in 1988 (law 362),

when the Economic and Financial Plan (EFP) was introduced to strengthen the long-term

planning and to lower the binding strength of a single financial law bill, which had made the

approval process quite long and complex in the past (Clemente 1992). The EFP was to be

implemented through the budget law and the annual and multiyear budgets. According to this

framework, the annual budget decisions were a consequence of a series of legislative and

non-legislative acts generally defined as public-finance documents (EFP, forecast reports, law

approving the forecast budget, budget law, etc.).

Looking at 1988, the textual analysis shows that the prevailing arguments used in order to

describe the budgeting and accounting processes were very much related to the traditional PA

discourse (TABLE 1). In particular, there was a prevalence of arguments supporting or re-

proposing the traditional systems. For instance:

‘We are all aware of the importance of the last revision of the budget, from which the final

report stems and which identifies the establishments of amounts receivables and the amounts

to be paid. It thus prescribes a series of requirements to be complied with for next year's

budgeting procedures, especially for the preparation of the Economic and Financial Plan. I

thus recommend to the Chamber the approval of my amendment...’4 (First discussion of the

Chamber of Deputies, 6th July 1988).

The most frequently co-occurring codes were PA1 and NPM1 (i.e. arguments in support of

both the old PA and the NPM ideas – see TABLE 2). Moreover, only a very few sections of

approved, authorize governments to incur future commitments. Commitment-based reports show, among other data, the actual commitments incurred by governments during the past financial year.

3 The budget detailed the revenues to be ascertained and collected, the expenditures for which a commitment was estimated and would be paid and the subsequent differential results (public savings, net balance to be financed, net debt and resources to the market). The Finance Law established the annual reference financial and legal framework for the period included in the long-term budget (the three year budget).

4 The authors would like to stress that the ideas and expressions quoted in the paper do not represent their personal views on accounting systems, their reforms and... Italian syntax. The authors tried to give a translation which was as adherent as possible to the original Italian text.

the 1988 documents highlighted arguments against the use of the traditional accounting tools

(i.e. PA2):

‘Mr President, the 1978 law that we are going to reform was born when in the Parliament

there was a widespread idea that there was no interest in discussing the budget. Ample was

the sensation of complete impotence: the budget was a mere document for recording actions

already taken. The French defined this situation as the "three Ls" process of budgeting,

liturgie, litanie, léthargie, and thus it had to be reformed. As a consequence, the law aims at

giving back to budgets a minimum of accessibility, flexibility, decisional capability’ (First

discussion of the Senate, 26th July 1988)

In 1997, law no. 94 introduced a further significant reform in the Central Government

budgeting, accounting and reporting by simplifying and revising the structure of the budget

and introducing accruals and cost accounting tools. First of all, a clear distinction was made

between the political and the managerial budgets. The former, to be approved by the

Parliament, was significantly aggregated. The latter was a further articulation of the political

budget, and was aimed at authorizing administrative action. The cost accounting system

required the definition of cost and responsibility centres in each Ministry. Cost accounting

items had to be directly related to efficiency and effectiveness indicators identified by each

Ministry. The new (accruals based) and the old (cash- and commitment- based) accounting

systems had to be integrated, and the conversions highlighted. Costs were recorded by cost

centres, nature, and destination/function. Through documents called Preliminary Notes, each

Ministry was asked to identify its own objectives and related resources, together with the

indicators to measure their results. The newly structured costing system was enacted and put

into practice in 1999, through the ‘Circolare 32’.

As a consequence of this, budgeting, accounting and reporting were now simultaneously kept

under the cash, commitment and accruals bases and supplemented by non-financial

performance measures. However, the accruals budget represented a mere additional

informative support to the formal approval of the cash and commitment-based budget. This

situation is mirrored by the political debate that, despite the attempt of the 1997 law and the

legislative decree to put forth new managerial and performance measurement tools, still

highlighted a prevalence of the traditional PA discourse (TABLE 1). In this case, however,

differently from 1988, arguments supporting PA and NPM ideas tended to be kept separate,

as shown by the fall in the number of PA1 and NPM1 co-occurrence in the same paragraph

(with an average 47.33 per document in 1988 vs. 21 in 1997 – see TABLE 2).

On the trail of the changes, in 1999 PA finally lost ground to the more recent NPM arguments

(TABLE 1), so that a peak in ideas supporting or describing the new managerial systems

could be identified:

‘Managers are allocated tasks concerning direction, management, spending, organization

and control. They are responsible for administrative activities, management and results’

(Circolare 32, 1999)

And

‘... The total cost of each item (inventories and expenses) as above calculated is referred to

the relevant cost centre’ (Circolare 32, 1999)

The PA discourse was still present, but in the background. It is interesting to notice that

topics related to the traditional model of PA (such as the importance of complying with the

law requirements and sticking to the formal administrative procedures, and the use of the

word ‘bureaucrat’) were usually used to support it or recall its long-lasting importance, rather

than to criticise it. As a consequence, and consistently with the previous periods, there were

again only a very few paragraphs using terms such as ‘cash’, ‘expenditure’ or ‘bureaucratic’

to challenge the PA model (TABLE 1). In 1999 the co-occurrence between NPM1 and PA1

jumped up to 139 paragraphs per document. This highlights that, despite the increase in

NPM-cues occurrences, arguments in support of PA were still present and used as a basis to

encourage managerial changes themselves (see the identification of cost centres and new

classification of expenditures and costs by objective functions). For example:

‘These norms, besides introducing an innovation in the budget structure, state the

introduction of accruals accounting bookkeeping as far as Government services and

activities are concerned’ (Circolare 32, 1999).

In 2005, a late commentary related to the 1997 law re-established the importance of cash and

commitment as bases of accounting, together with a renewed focus on the bureaucratic

procedures to be followed and the classification of expenditures by function. At the same

time, however, the document kept the parallel between the old and the new systems, referring

also to cost accounting. This is the year where arguments in favour of NPM and PA

discourses almost balanced, as suggested by the occurrence of their cues (see TABLE 1). The

1997/1999 reform brought about significant innovations, but could not solve all the problems

of the old legacy and was further criticized because (Collevecchio 2004) the budgeting

process was still relying on incremental logics, with weak long-term orientation, the political

budget still presented more than 1,500 items of expenditure, there was an excessive presence

of ex-ante controls, and little attention was actually paid to non-financial results and

outcomes. As a consequence of these shortcomings, in 2007 (through the ‘Circolare 21’) the

traditional budget structure was modified again. The cash and commitment-based budget was

reorganized by classifying expenditure first into missions and then into programmes. The

new classification was expected to guarantee a closer tie between ‘allocated resources and

pursued actions’ by the Government.. In 2007 also the cost accounting system was partially

revised.Costs were now recorded by nature, centre, mission and programme and were

mirrored in the accrual budget. . In parallel, an annual spending review to assess the actual

Ministries’ needs was set in place.

A substantially similar pattern as in 2005 emerges in the 2007 parliamentary discussions and

documents, where modifications were made to the old cash- and commitment-based reporting

structure (with the adoption of the COFOG nomenclature). Although the change was mainly

related to the traditional model, however, NPM arguments were still present and represented

more than 40% of the overall cues (TABLE 1). As usual, these were mainly co-occurring

with PA1-type of ideas (TABLE 2).

Finally, in 2009 (law 196), the role of the spending review process and of the cash-based

system of accounting was further strengthened in order to adjust to the European Union’s

financial and budgetary arrangements, and to align the Central and Local Governments’

budgeting processes. The main resulting change was the transition towards a cash-based-only

budget5. In 2010 a commentary to the 2009 reform was also issued. The textual analysis

shows that in 2009 and 2010 PA1 arguments (favourable to the traditional model) overtook

those in favour of the NPM discourse again (TABLE 1). In the 2009 documents, the

combination of PA1 and NPM1 cues occurred 58.06 times; this number more than doubled

(132 times – TABLE 2) in 2010. In 2010 the data also show the highest co-occurrence of

PA1 (in favour) and NPM2 (challenging NPM ideas, an average of 7 per document – see

TABLE 2) of the whole period considered. This confirms the return of a strong traditional PA

orientation in the Italian Central Government discussion.

5 The Law n. 196/2009 imposed, after a two-years trial period, the shift to a cash-based budget only, but the subsequent Law n. 39/2011 has set aside this possibility strengthening the role of cash budget within a mixed system (cash- and commitment- based).

But what about GOV? Surprisingly, over the 22 years analysed, GOV always represented the

least important and most marginal discourse. Topics such as transparency, stakeholders and

network were scantly quoted and not always present in the documents. While remaining

poorly visible as a self-standing discourse, since 2007 arguments in favour of these ideas

(GOV1) have been increasing both when presented by themselves (although always keeping

a low base - 8.1% and 8.7% in 2009 and 2010 respectively - see TABLE 1), and in

combination with the other two discourses (in 2010, in particular, GOV1 co-occurs 37 times

per document with PA1 and 34 times with NPM1, the highest rates over the 22 years - see

TABLE 2). This might suggest that GOV ideas are actually starting to seep into the Italian

scene, but only in (and with the) support of the more established PA (especially) and NPM

systems.

Discussion: from PA to NPM and back

Based on the textual analysis, two ‘peaks’ (in 1999 and in 2009) can be identified in the

discourse cues related to the Italian Central Government accounting reforms. In 1999, indeed,

NPM ideas and discourses overtook PA arguments for the first (and last) time, whereas their

importance swapped again in 2009.

In 1999 the reform concerned the implementation of the new cost and accrual accounting

system previously passed in 1997. The main cues of the period concerned ‘cost’ (288 counts,

representing 1.74% of the overall document’s words), ‘cost accounting’ (185 counts, 1.05%)

and related ideas such as:

‘The importance of the new process requires the full cooperation and participation of all

government departments that are first concerned with the budget formulation by cost centres

for the year 2000. In this context, it is necessary for the State Administrations to organize

offices and procedures in to enable the most effective performance of new activities,

including the identification - for each cost centre - of the officials to devote to the tasks of

acquisition, detection, monitoring and transmission of costs.’(Circolare 32, 1999)

Cues supporting the introduction and identification of ‘managerial responsibilities’ (109

counts, 0.66%) were also significant, together with those positively referencing the

‘managerial budget’ (56 times, i.e. 0.34% of the document’s words):

‘The action on the organizational model, conjoined with the support of a specific accounting

instrument - the cost accounting system based on cost centres - allows Administrations to

achieve a constant and simultaneous monitoring of its operating costs, and to initiate an on

going dialogue with the Ministry of the Treasury, the Budget and the Economic Planning for

evaluations related to financial planning and the preparation of the annual

budget.’(Circolare 32, 1999)

The first effects of the reform in the Government’s everyday life and operation, and in the

criteria they were using to take decisions, became thus visible.

In 2009 the wave of new reforms seemed to be forgotten in favour of a return to old PA

themes. In particular, the reform process went back to focus on and strengthen the role of

cash-based accounting. As a consequence, the main discussion revolved again around

traditional PA issues, such as the importance of enforcing the new accounting ‘rules’ (2,751

counts, representing 0.93% of all the 2009 documents’ words):

‘As of today, the results of this debate, in particular, pose as a matter of evident urgency the

need to reform the accounting rules in order to adapt the regulatory framework of the

government's public finance to the recent institutional changes and conditions of public

accounts.’ (Transcript from the Senate’s Committee discussion on Law 196, 2009, 26th

March 2009)

Also the focus on ‘cash’ (334 counts, 0.12%) and ‘expenditure’ (1,289 counts, 0.48%) re-

emerged with new and increased strength:

‘The law draft, in fact, on the one hand systematize the innovations made to the budget

during the last two financial years, on the other hand it delegate the Government the

completion of the reform, also providing a gradual transition from a preparation of this

document in terms of obligation and cash, to a compilation in terms of cash only. From

another perspective, it is confirmed the non-binding of the resources allocated to programs of

each mission, with the explicit provision of the notice, within the program, of the share of the

binding and non-binding expenditures.’ (Transcript from the Chamber of Deputies’

Committee discussion on Law 196, 2009, 9th November 2009)

Looking at the evolution of the accounting reforms over time, the evidence seems to suggest,

more than a reversal, a long-lasting commitment of the Central Government to traditional PA

ideas and accounting systems. An explanation for this could be found in the civil-law

tradition of the Italian system, which is also reflected in the predominant juridical background

of Italian bureaucrats and politicians (Kickert, 2005; Ongaro, 2011).

In Italy, the PA discourse, which was already predominant before the Nineties, tends to

reproduce itself, and is always present in the background of every accounting reform. Even

when a formal managerial change is required, there is little incentive to replace the old ideas,

which are never really put under scrutiny, but rather reaffirmed under different shapes and

expressions (e.g. ‘... Accrual-accounting bookkeeping and outputs are used also to define the

budget proposals, to better allocate resources, to plan financial activities, to monitor the

financial impacts of budgetary changes and cost and legislative requirements in the areas for

which the Administrations are responsible. They are used by the Administrations involved

and by the Ministry of Treasure, to which data are communicated by the other

Administrations – where possible via ICT evidence – through the responsible Accounting

Offices’ – Decree law 279, 1997). The introduction of NPM tools and arguments seems to be

the condition for the old PA system to survive and reproduce itself.

A similar pattern can be seen in the development of the GOV discourse, which increases over

time, but always in combination with the other two discourses, and especially PA. This

provides evidence to Pollitt and Bouckaert’s (2011) argument that we are currently

witnessing a third stage of reforms, and the latter, rather than being GOV-dominated is

characterised by a neo –Weberian upsurge. Old PA ideas are, thus, reinterpreted shifting from

the view of a closed system of public administration to an open one, where external

transparency, participation and inclusion are pushed forward. While in the late Eighties these

concepts were relatively neglected, in the late Nineties and in the Two-thousands they are

introduced and re-interpreted in a bureaucratic way. For instance:

‘The program session, in our opinion, not only works as protective belt for the budget law

and budget procedures, but also as a research stage of the synthesis to be achieved through

the economic and financial planning document. It would be a phase of participation that,

stretching over for a few months, allows the demands of the various stakeholders and local

governments to compete with each other and with the compatibility coming from the

resources available to the country.’ (Transcript from the Chamber of Deputies discussion on

Law 362/1988, 6th July 1988)

And

‘Our evaluations begin from some distinct considerations. The European accounting system

requires a more and more modern and efficient overall management of public spending and

related Member States policies. Fiscal federalism, that we have taken in Italy, needs standard

criteria in order to evaluate and guarantee the participation of all the institutions in the

management of the country tax system, from the municipalities, the Regions, the State, to all

those who, in one way or another, belong to the public administration and manage public

spending.’ (Transcript from the Senate discussion on Law 196/2009, 16th June 2009)

The Italian context clearly still highlights what Tomasi di Lampedusa already suggested one

century ago: ‘If we want things to stay as they are, things will have to change’ (Tomasi di

Lampedusa 1960, p. 40). Both NPM and GOV ideas appear to have been engrafted in the pre-

existing PA discourse, which, in turn, has accompanied and buffered the introduction of all

the subsequent reforms. This probably made the latter appear less threatening to politicians,

bureaucrats and other stakeholders involved in the process, and, at the same time, allowed the

original bureaucratic features to be re-established and perpetuated under the new disguise of

the time.

Conclusions

Our paper aimed to explore whether and how NPM and GOV arguments replaced,

supplemented or integrated traditional PA ideas in the parliamentary discussion of the last 22

years. This was done carrying out a discourse analysis of the main Italian Central

Government accounting reforms documents.

Our findings highlight a substantial stability of the PA argument, notwithstanding the

multiple attempts at introducing more NPM- and GOV-like accounting tools and ideas. In

Italy the overall reform process analysed seems far from be linearly evolving towards a more

managerial or governance model, rather PA ideas still prevail throughout all the periods

under analysis, with the exception of a NPM peak in 1999. This temporary change in focus

might be strictly related to the introduction of specific systems (cost accounting and accruals

budgeting), the relevance of which subsequently fades (again, in favour of discussions about

the old cash-based accounting). Moreover, the analysis shows that, at least in the Italian case,

more than a replacement of ideas over time, there has been the coexistence of multiple

discourses with a lasting and significant predominance of the traditional PA one.

Our results suggest that, at least in the context under analysis, NPM and GOV, far from being

new revolutionary paradigms, can be described as (more or less) fashionable trends that do

not leave a significant trace both in the practice and in the rhetoric of reforms. Rather than

being seen as ‘tsunami’, they can be compared to waves fading on the foreshore.

The PA model, far from being eradicated by the other discourses, remains quite stable over

time in its main components, but adapts to new contexts and requests chameleon-like (or

Gattopardo-like) appearing to absorb and take on features of the incoming fashionable ideas

(Abrahamson 1996; Christensen and Lægreid 2011; Liguori 2012). Both NPM and GOV

arguments are used in the rhetoric (and by politicians) as an expression of ideology rather

than as an establishment-challenging tool (Fattore et al. 2012).

Italy represents an interesting case of how reforms are implemented in a legalistic

administrative tradition. PA principles appear to reflect at least some of the stable features of

government, which are then adjusted and modified to take into consideration the changing

roles and scopes of the administration, the shifting in the delivery modes of public services

and in the accountability systems proposed by the other ‘fashionable’ models. If the literature

has often described an ‘evolution’ from PA to NPM and GOV (Marsh and Rhodes 1992;

Milward and Provan 2003; Peters 2008; Osborne 2010), our analysis suggests that NPM and

GOV cannot be considered (at least so far) as having the same nature as the traditional PA

model. Moreover, when new ideas, approaches or trends manifest themselves, they do not

necessarily replace the previous ones, but rather accumulate and combine over time and

space.

Overall, our results restate the existence of a ‘neo-Tocquevillian’ paradox (Hood and Peters

2004), but showing that this happens not only at the organizational level, during new

systems’ implementation, but also at the discussion level, even before reforms come into

action. Managerial changes, in particular, tend to be introduced using the same old

‘bureaucratic’ language and procedures. Further studies might tell us if also a ‘managerial

paradox’, i.e. the politicization of managers, happens whenever managers interpret these

same discourses.

Finally, our analysis shows how textual analyses can be useful instruments in public

administration research, consistently with what Fattore et al. (2012) found adopting content

analysis. More specifically, we show that discourse analysis can shed new lights for a better

understanding of the unfolding of public-sector reforms.

Further research avenues might also involve the study of discourses emerging from different

actors participating in the reform process, as well as a comparison of the discourses

developed over time in the different levels of government or in different countries. Also, as

the Italian context keeps changing in unexpected ways (see the return of the obligation- and

commitment-based system in 2011), it would be interesting to keep following the discussions

in order to identify possible future trajectories of change and its related discourses.

This paper also holds important implications for practice. From a policy-making perspective,

in contexts similar to the one under study, based on civil law traditions with a unitary but

increasingly decentralised structure and a coalition-government system (Pollitt and Bouckaert

2011), the introduction of new reforms appears to be slow and difficult, and is often more

successful when it is respectful of the extant PA model, which, far from being discarded,

remains well rooted in the public sector. From an organizational point of view, this underlines

the importance of reassuring civil servants and politicians on the consistency of the ‘new’

proposed models with those they have been accustomed to, and of using the traditional

language of PA to explain and introduce new ideas and tools and make them accepted.

However, this has to be balanced off by an actual change in the old systems and routines,

using continuity to bring disruption and avoiding the enactment of another Gattopardo-like

approach.

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Tables

TABLE 1 Occurrence of discourse cues

PA1 PA2 NPM1 NPM2 GOV1 GOV2 TOTAL COUNTS

TOTAL DOCUMENTS

1988 677 21 292 37 29 7 1,063

3 63.7% 2.0% 27.5% 3.5% 2.7% 0.7% 100.0%

1997 1260 34 770 22 147 3 2,236

16 56.4% 1.5% 34.4% 1.0% 6.6% 0.1% 100.0%

1999 130 6 281 0 6 0 423

1 31.2% 1.4% 67.4% 0.0% 0.0% 0.0% 100.0%

2005 43 1 38 0 2 0 84

1 52.4% 1.2% 46.3% 0.0% 0.0% 0.0% 100.0%

2007 32 0 25 0 5 0 62

1 51.6% 0.0% 40.3% 0.0% 8.1% 0.0% 100.0%

2009 2,684 34 1,787 51 435 34 5,025

17 53.4% 0.7% 35.6% 1.0% 8.7% 0.7% 100.0%

2010 40 0 6 0 2 0 48

1 81.6% 0.0% 12.2% 0.0% 2.0% 4.1% 100.0%

TABLE 2 Discourse co-occurrences per year, 1988-2010

1988 GOV1 1997 GOV1 GOV2 0.00 GOV2 GOV2 0.00 GOV2 NPM1 2.33 0.33 NPM1 NPM1 6.06 0.13 NPM1 NPM2 0.00 0.00 2.00 NPM2 NPM2 0.25 0.00 0.19 NPM2 PA1 5.67 0,67 47.33 5.33 PA1 PA1 8.38 0.13 21.00 0.56 PA1 PA2 0.67 0.00 4.00 1.33 3.33 PA2 PA2 0.13 0.00 1.38 0.00 1.00 PA2

1999 GOV1 2005 GOV1 GOV2 0.00 GOV2 GOV2 0.00 GOV2 NPM1 7.00 0.00 NPM1 NPM1 3.00 0.00 NPM1 NPM2 0.00 0.00 0.00 NPM2 NPM2 0.00 0.00 0.00 NPM2 PA1 4.00 0.00 139.00 0.00 PA1 PA1 2.00 0.00 24.00 0.00 PA1 PA2 2.00 0.00 8.00 0.00 4.00 PA2 PA2 0.00 0.00 1.00 0.00 1.00 PA2

2007 GOV1 2009 GOV1 GOV2 0.00 GOV2 GOV2 0.47 GOV2 NPM1 1.00 0.00 NPM1 NPM1 19.18 1.53 NPM1 NPM2 0.00 0.00 0.00 NPM2 NPM2 0.71 0.35 1.76 NPM2 PA1 2.00 0.00 11.00 0.00 PA1 PA1 20.82 1.82 58.06 2.35 PA1 PA2 0.00 0.00 1.00 0.00 0.00 PA2 PA2 0.76 0.06 1.65 0.29 1.88 PA2

2010 GOV1 GOV2 3.00 GOV2 NPM1 34.00 4.00 NPM1

NPM2 2.00 4.00 5.00 NPM2 PA1 37.00 8.00 132.00 7.00 PA1 PA2 0.00 0.00 3.00 1.00 3.00 PA2

Figures

FIGURE 1 PA, NPM and GOV: Discourse evolution

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

80,0%

90,0%

1985 1990 1995 2000 2005 2010 2015

PA1

PA2

NPM1

NPM2

GOV1

GOV2

Appendix

Public Administration Discourse New Public Management Discourse Public Governance Discourse

Hinings and Greenwood

1988; Pollitt and

Bouckaert 2004; Hammerschmid

and Meyer 2005; Schedler 2007; Liguori 2010;

Osborne 2010; Liguori and

Steccolini 2012

Main ideas and arguments

Public administration (citizens) Service provider (customers)

Governance and market rules setter (stakeholders)

Based on professional differentiation Based on the integration of professional activities Based on negotiation of values, meanings and relationships

Professional practice defined by intrajurisdictional professionals

Analytical appraisal by transjurisdictional management Enablement skills: Activation, Orchestration, Modulation

Public administration as a closed system Public administration as an open system

Public administration as an ‘open closed’ system (external focus but providing enclosing regulation of public services)

Constitutive role of legitimacy Performance-driven legitimacy Legitimacy through negotiated agreements and the mechanism of democratic accountability

Objectives selected in accordance with political rationality

Objectives selected in accordance with economic and organizational rationality

Objectives selected in accordance with networking and negotiation with different actors

Neutral and objective administrative activity, separated from politics and executing law

Administrative activity interacting with politics: politics sets strategy, managers reach objectives

Administrative activity interacting with the environment: systematic and effective consultations with stakeholders

Structures and systems

High differentiation and low integration Modest differentiation and high integration Integration of people, processes, structures, and resources

Incremental resource allocation system Non-incremental resource allocation system

Inter-organizational and negotiated resource allocation (shared and agreed by multiple actors with differe power)

Hierarchical bureaucratic control system Decentralized control system Inter-organizational control systems with different scope and tightness (private, public and social actors)

Internal organization untied to selected objectives

Internal organization tied to selected objectives External organization and network of actors tied to negotiated objective

Focus on formal procedures Focus on processes and results (input-output) Focus on ‘steering’ of complex networks in societal policy sectors

Formal evaluation, based on regulation Efficiency and effectiveness evaluation Governance of citizen engagement,

transparency, accountability, equity (fair procedures and due process), partnership, sustainability and impact of public services

Accounting structures and systems

Main purpose: to limit spending; to show compliance of actions with budget

Main purpose: to orient behaviours toward goal attainment Main purpose: to answer stakeholders’ needs

Basis: obligation and cash Basis: accruals - Focus: financial indicators and inputs Focus: performance indicators, outputs Focus: outcomes,transparency and

accountability indicators

Tools: budgetary accounting Tools: executive budget, accrual – based reporting, managerial control systems, performance measurement

Tools: consolidated statements, social/sustainability reporting, stakeholders’ reports

Centralized data gathering, information processing and use (Finance Officer)

Decentralized data gathering, information processing and use; integrated accounting system

Data gathering from different actors of the network, inter-organizational integration of information systems

Finance Officer Audit control/Controller/integrated management ‘Network manager’ as conductor, intermediator and facilitator

Keywords

- Bureaucratic/bureaucracy, - citizen, - rules/norms/requirement, - compliance, - cash/commitments, - ‘funzionario/pubblico

ufficiale’/administrator/ bureaucrat, - execute/ executor, - hierarchy/ Hierarchical, - neutral, - objectivity/ Objective, - expenditure/spending, - procedures, - central(ized), - function, - inflexibility/rigidity, - overregulation, - independence.

- NPM/managerialisation, - efficiency, - effectiveness, - output/results, - outcomes, - customers/client, - managers/managerial, - strategy, - performance/performance,

measures/indicator/target/objective/to measure, - satisfaction, - accruals/resources/value for money, - contract, - quality/appropriateness, - expenses, - audit/auditing, - cost/ amortisation, - process, - flexibility,

- Governance, - transparency, - accountability, - outcomes, - stakeholder, - network, - partnership/partners, - sustainability/suistainable, - ethic, - equity/fair, - participation/participative, - integration/integrated, - satisfaction, - consolidation/consolidated, - negotiation/consultation,

- civil society/nonprofit/third sector.

- decentralised/devolved, - responsible/responsibility, - ‘public business’, - market, - corporatization/agencies/agencisification, - competition/tendering/benchmarking, - privatization, - deregulation.