Governance Failure

There is much work on market failure and state failure but comparatively little on the forms and causes of governance failure. This involves the failure of the sort of self-reflexive deliberation and self-organization that occurs in networks, public-private partnerships, corporatism, private interest government, regulated deregulation, and so on. Yet, as such forms of governance become more important in contemporary societies, it becomes more urgent to consider if they too are prone to failure and what happens if they fail.

Different modes of governance fail in different ways. Market failure occurs when markets fail to allocate scarce resources efficiently in and through pursuit of monetized private interest. State failure is generally seen as a failure to secure substantive collective goals based on political divination of the public interest. The recurrence of market and state failure has prompted interest in networking, corporatism, partnerships, and other forms of reflexive self-organization. But it is not just market forces and imperative coordination that fail; so do continuing deliberation and negotiation even when conducted in good faith. The criterion for governance failure is nonetheless different. There is no pre-given formal maxim or reference point to judge its success, as there is with profits in the economy or the (imaginary) perfect market outcome. Nor is there a substantive criterion—realization of specific political objectives connected to the (imagined) public interest—as in top-down state command and control. However, insofar as governance is intended to modify goals in and through negotiation and reflection, it will fail when there is continuing disagreement about the continued validity of the shared objectives for networked cooperation for all the partners.

Bob Jessop distinguishes four more specific factors behind the failure of governance. First, the conditions of successful action may have been oversimplified or there may be deficient knowledge about causal connections affecting the object of governance. This raises the “governability” problem; that is, could the object of governance ever be manageable, even with adequate knowledge? At best, one finds partially successful governance of delimited objects of governance within specific spatial and temporal horizons of action—at the expense of deliberately neglected or unrecognized costs elsewhere. Second, coordination problems may occur within and across the interpersonal, interorganizational, and intersystemic levels where governance is adopted. These levels are often related in complex ways. Third, gaps can open between representatives engaged in communication (networking, negotiation, etc.) and those whose interests and [Page 382]identities are being represented. This is common in corporatism, political parties, and social movements and raises questions of legitimacy, effectiveness, and resistance. Fourth, where several distinct governance arrangements exist to deal with interdependent issues, problems can arise due to inconsistent definitions of the objects of governance, different spatial and temporal horizons of action, and their association with different interests and balances of force.

These generic tendencies to governance failure may be reinforced in specific historical contexts. For example, capitalism requires a contradictory balance between marketized and nonmarketized organizational forms. Although this balance is often understood in terms of the relative weight of market and state in securing the conditions for economic growth and stability, governance adds another site where the balance between market and nonmarketized solutions can be contested rather than introducing a neutral third term. This is why the promise of symmetry in social partnership may not be realized and why governance arrangements cannot permanently suspend or harmonize the inherent contradictions and crisis-tendencies of capitalism. Similarly, problems arise from the overall institutional architecture and operations of the state. One alleged advantage of governance is that it can cut across different scales of government and their associated territorial boundaries, but this raises tensions over the ultimate location of sovereignty in multilevel systems with variable geometries. The European Union provides many examples of this. Analogous problems arise regarding temporal horizons of action. A major function of current forms of governance is to enable decisions with long-term implications to be divorced from short-term political (especially electoral) calculations. This separation is not always easy to maintain. Finally, even where coordination mechanisms have clearly specified functions, national territorial states typically monitor their effects on their own political capacities and their implications for social cohesion. In short, all forms of coordination—market, command, governance, solidarity—are liable to be exercised under the primacy of the political.

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