Public management, policy capacity, innovation and development

Abstract

In this paper we discuss the question of what factors in development policy create specific forms of policy capacity and under what circumstances developmentoriented complementarities or mismatches between the public and private sectors emerge. We argue that specific forms of policy capacity emerge from three interlinked policy choices, each fundamentally evolutionary in nature: policy choices on understanding the nature and sources of technical change and innovation; on the ways of financing economic growth, in particular technical change; and on the nature of public management to deliver and implement both previous sets of policy choices. Thus, policy capacity is not so much a continuum of abilities (from less to more), but rather a variety of modes of making policy that originate from co-evolutionary processes in capitalist development. To illustrate, we briefly reflect upon how the East Asian developmental states of the 1960s-1980s and Eastern European transition policies since the 1990s led to almost opposite institutional systems for financing, designing and managing development strategies, and how this led, through co-evolutionary processes, to different forms of policy capacity.

Economic development and evolving state capacities in Central and Eastern Europe: can “smart specialization” make a difference?

“…Our approach combines the "what" and "how" perspectives on state capacities. We distinguish between three layers of state, policy and administrative capacity and treat capacity not as universal and constant, but as evolutionary and expressed in different processes of policy making and implementation (Karo and Kattel 2014). These processes can be also understood as persistent "routines" characterizing specific policy domains, or organizations (term as used by Nelson and Winter 1982, 14).…”

“…In the next section, we build an analytical toolbox that looks at state, policy, and administrative capacities through the lens of "routines" to emphasize the contextspecific differences in how these capacities evolve and in turn affect the translation and adoption of different policy rationales (Karo and Kattel 2014). Section three links the concept of SS with our analytical framework and discusses the expectations and challenges SS poses on state institutions and policy routines in CEE.…”

State Owned Enterprises as Instruments of Innovation Policy

“…Thus, macro governance issues relate not only to politics-SOE linkages, but also to more institutional questions of policy and administrative capacities of ministries, agencies and regulators relevant for the technological and economic sectors and innovation systems where specific SOEs function (see also Karo and Kattel 2014).…”

Emergence of societal challenges-based innovation policies in market-based innovation systems: lessons from Estonia

“…Thus, the limited lessons drawn by Mowery et al (2010) and Foray et al (2012) from the historical mission-oriented programs for the current societal challenges oriented policies emphasize the need to balance between centralized planning of priorities, challenges and goals, and decentralized management and implementation of specific programs to balance between coordination of goals/challenges and managing the uncertainty of technological development and diffusion trajectories. The key question of institutional design is related to whether the existing STI policy institutions and organizational routines allow (both in terms of policy space and capacities) for active and coordinating role for the state, and how to "design" such routines if the system lacks them (see also Karo and Kattel, 2014;2015b). The principal choices are between establishing new challenge-oriented programs (single measures) vs creating new organizations (or, reforming existing ones).…”