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Business and Government: Collaborators or Competitors?

For years, government's greatest collaborator has been its greatest competitor. Can government and business ever realize a happy ending?

The future success of American public management hinges on the relative tempos of two conflicting trends. One involves collaboration between business and government; the other involves competition.

By "collaboration" I mean something looser than fee-for-service contracting and tighter than voluntary charity. It refers to private institutions signing up to work with government to advance agreed-upon public missions on terms of shared discretion -- that is, neither the public nor the private party monopolizes control. No tailored statistical series tracks public-private collaboration, so it would be silly to make precise claims about its current scale or rate of growth. But there is a lot of indirect and anecdotal evidence to suggest that collaboration is surging in absolute terms, and relative, both to direct governmental action and to other forms of joint work with private actors.

Jack Donahue in this week's column offers expert advice on collaboration, and opens the door to a sensitive area. When does collaboration foreclose competition? The true test of a public official may be how he or she sets up a system that encourages collaborative groups to compete against each other. This column raises important issues for those interested in collaboration as well as the good ideas and taxpayer protection that rests on healthy competition.

- Stephen Goldsmith

Multiple forces propel this growth. One is incremental improvements to various enablers of collaboration -- from information and communications technology to sophisticated contracts -- over the past several decades. Another is a gradual shift toward complex tasks that invite or demand private involvement. Examples abound, including the charter-school movement, park conservancies, the post-9/11 port-security regime, occupational training and myriad aspects of the American health care system. The record presents many success stories and no shortage of failures. Some regrettable examples of collaboration are due to the misguided application of the collaborative approach, some to ham-handed implementation and some to a combination of misguidance and malfeasance. But the picture is improving. We are getting better at structuring and managing cross-sectoral collaborations.

And none too soon, because a more traditional model for collective action -- building public agencies and staffing them with public workers under the direction of governmental managers -- is becoming ever more fragile, due in large part to competition between business and government.

This competition is not over capital or authority or popular legitimacy or other conventional subjects of a sectoral tug-or-war. The rivalry, rather, is for talent. Over the past thirty years or so the middle-class economy of the mid-20th century gave way to a starkly polarized working world. The bottom has dropped out and the ceiling has blown off of the private sector's pay distribution. Government, meanwhile, has made no major changes in its employment practices -- and by not changing, has distanced itself drastically from the rest of the economy.

Money isn't everything, but compensation matters enough to a large enough share of the workforce, that pay and benefit differentials have been shrinking the proportion of each generation's ablest that opt for government work. And the more the public sector's share of top talent dwindles, the greater the appeal of economizing on that scarce resource. Astute public leaders faced with challenging missions, knowing they wait in vain for enough high-quality reinforcements within government, can leverage their impact through collaboration with private actors. In case after case we see public tasks that in other contexts -- other nations, and earlier versions of America -- would be done by public organizations, handled instead by a small corps of governmental leaders adept at manipulating private motives.

An optimistic scenario is for the collaborative hybrid -- with much of the actual operating capacity residing outside government -- to become an increasingly common way in which government gets its work done. The tricky part, though, is that while collaboration can let government accomplish its missions with fewer public workers, those few must be exceptionally able. Orchestrating collaboration calls for analytical and managerial skills of the highest order. It remains to be seen how -- indeed, whether -- we will bring this part of the race between competition and collaboration to a happy ending.

John D. Donahue is a GOVERNING contributor. He is the Raymond Vernon Lecturer in Public Policy, faculty chair of the Harvard Kennedy School Case Program and the SLATE teaching initiative.
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