1 00:00:09,210 --> 00:00:10,250 Welcome back. 2 00:00:10,250 --> 00:00:15,500 In an earlier lecture Professor De Bruijn talked about securing public values in infrastructure sectors. 3 00:00:15,510 --> 00:00:20,670 With a trend towards deregulation, liberalization, and privatization, it was obvious that public 4 00:00:20,670 --> 00:00:22,980 values had to be secured. 5 00:00:22,980 --> 00:00:24,910 Here we want to have a closer look into: 6 00:00:24,910 --> 00:00:27,259 the process through which public values are defined; 7 00:00:27,259 --> 00:00:33,290 how they are secured in specific institutions; and the role of different actors in that process. 8 00:00:33,290 --> 00:00:40,000 We will look at the various steps in which public values are defined, 9 00:00:40,000 --> 00:00:42,620 how institutions are designed, 10 00:00:42,620 --> 00:00:46,480 this gives us an overview of the role of the different actors and the pitfalls and bottlenecks 11 00:00:46,480 --> 00:00:49,559 to be expected. 12 00:00:49,559 --> 00:00:54,200 As you are following this MOOC, you probably have or are aspiring to a role in one of these 13 00:00:54,200 --> 00:00:56,460 roles in infrastructure sectors. 14 00:00:56,460 --> 00:01:01,469 Or you are just an interested because of the news you are confronted with about infrastructure. 15 00:01:01,469 --> 00:01:04,400 Let's have a look at this news item 16 00:01:04,400 --> 00:01:07,400 The adventures of HS2. 17 00:01:09,400 --> 00:01:14,000 Episode one: the great train robbery. 18 00:01:14,000 --> 00:01:21,000 One day Billy, Pat and bob were minding their own engines when HS2 terminated in front of them. 19 00:01:21,000 --> 00:01:27,000 This is a dead end mate, said bob. I know, I'm hiding, said HS2. 20 00:01:27,000 --> 00:01:31,200 What are you hiding from? Asked Pat. From the facts, said HS2. 21 00:01:31,200 --> 00:01:35,000 Well what sort of facts are you hiding from HS2? Asked Billy. 22 00:01:35,000 --> 00:01:43,000 The treasury said I will be 73 billion pounds, or even more! That's like one hundred millennium domes, said Pat. 23 00:01:43,000 --> 00:01:49,000 Bloody hell, said Bob. Swearing, even though we knew it wasn't allowed on children's TV. 24 00:01:49,000 --> 00:01:57,300 But won't you serve an entire crowd and all? Said Billy. But you save 35 minutes from London to Birmingham! Said Bob. 25 00:01:57,300 --> 00:02:02,000 After spending tens of billions of pounds I'll actually save only twenty minutes. 26 00:02:02,000 --> 00:02:08,300 That's criminal! Said Bob. Camden will be a building site for eight years! Said HS2. 27 00:02:08,300 --> 00:02:13,900 I bought myself some trousers on a market once, said Pat. Rather unexpected of me. 28 00:02:13,900 --> 00:02:24,000 I will ruin 34 ancient woodlands, destroy 300 miles of head roads, devastate communities and destroy unique wildlife habitats. 29 00:02:24,000 --> 00:02:26,500 That's bunkers, said Billy. 30 00:02:26,500 --> 00:02:33,000 The only single diversion I make is around the most affluent parts of George Osborn's constituency, 31 00:02:33,000 --> 00:02:39,600 at an additional cost of its tax payers of six hundred million pounds. Said HS2 with a wink. 32 00:02:39,600 --> 00:02:48,000 The engines were fuming, the case for HS2 was so depressing it made them all want to throw themselves under a passing train. 33 00:02:48,000 --> 00:02:51,000 You can't hide from the facts any longer, said Billy. 34 00:02:51,000 --> 00:02:55,300 Oh I nearly forgot! Eight billion pounds will be caught from existing rail services 35 00:02:55,300 --> 00:03:00,500 and stations across the country, including wake field, just to pay for me! 36 00:03:00,500 --> 00:03:02,900 Bullocks say that, said Bob. 37 00:03:02,900 --> 00:03:10,920 As the engines made it clear they wanted to shove HS2 right up the junction. 38 00:03:10,920 --> 00:03:16,170 In the video you see a lobby group counter the public values the UK government is claiming for the 39 00:03:16,170 --> 00:03:19,630 High Speed Railway line 2: 40 00:03:19,630 --> 00:03:25,980 triggering investment and improving mobility with a clean mode of transport. 41 00:03:25,980 --> 00:03:30,230 The lobbyist claim ineffective use of government money and environmental damage. 42 00:03:30,230 --> 00:03:37,200 It shows the variety of public values that people are looking at when evaluating infrastructures. 43 00:03:38,560 --> 00:03:41,730 Let's look at this discussion from the perspective of public values a bit more. 44 00:03:41,730 --> 00:03:45,670 So, what are public values anyway? 45 00:03:45,670 --> 00:03:49,690 Public values are those values that governments have adopted to secure. 46 00:03:49,690 --> 00:03:56,690 To answer whether or not a value is a possible public value can be addressed in various ways. 47 00:03:57,010 --> 00:03:59,260 On the one hand there is normative theory. 48 00:03:59,260 --> 00:04:04,230 Economist like Baumol tend to limit the role of government to specific situations of market 49 00:04:04,230 --> 00:04:09,650 failure, through mechanisms that drive out informed competition. 50 00:04:09,650 --> 00:04:16,800 Policy scientist like Bozeman and Beck Jorgenson focus list and categorizing typical public values. 51 00:04:17,009 --> 00:04:21,100 Let's look at it more empirically. 52 00:04:21,100 --> 00:04:25,669 It makes sense that any value secured through a formal governmental decision making process, 53 00:04:25,669 --> 00:04:27,050 is a public value. 54 00:04:27,050 --> 00:04:32,389 So, when in democratic countries parliament decides that all trains should have toilets 55 00:04:32,389 --> 00:04:38,939 or busses should be burgundy red because of improved quality, this is a de facto pubic value. 56 00:04:39,960 --> 00:04:45,199 Obviously, it al starts with the moment that governments become concerned with these values. 57 00:04:45,199 --> 00:04:52,900 Let's look at it closer how in concept the steps in that process look in a democratic society. 58 00:04:52,900 --> 00:04:55,740 Let's look at step one: Advocacy. 59 00:04:55,740 --> 00:05:00,349 This is step between the voting citizen and the legislature. 60 00:05:00,349 --> 00:05:06,949 In that democratic society, the voters can put values on the agenda, they want secured. 61 00:05:06,949 --> 00:05:10,669 Parties or representatives are expected to pick up on these values. 62 00:05:10,669 --> 00:05:15,539 There is abundant normative theory on how that democratic process should run. 63 00:05:15,539 --> 00:05:20,169 Elections are the key moments in which voters are expressing their view on what important 64 00:05:20,169 --> 00:05:24,469 values are for their society. 65 00:05:24,469 --> 00:05:28,969 Periodic elections would make for a limited shift in the valuation of different public values. 66 00:05:28,969 --> 00:05:31,400 every four years, new values. 67 00:05:31,400 --> 00:05:36,870 However, in reality, the democratic process is much more dynamic. 68 00:05:36,870 --> 00:05:41,639 When a train accident occurs, the legislature is concerned about railway safety, often inducing 69 00:05:41,639 --> 00:05:44,370 further regulation of that value. 70 00:05:44,370 --> 00:05:47,090 In this process the media plays an important role. 71 00:05:47,090 --> 00:05:53,210 It sets the agenda of legislative branches, parliaments and representative bodies in all 72 00:05:53,210 --> 00:06:00,200 shapes and forms between the elections. Let's move to step two where policies are developed. 73 00:06:00,710 --> 00:06:06,150 Legislators work in formal decision-making with executive branch (ministers and secretaries) 74 00:06:06,150 --> 00:06:10,039 to deal with specific public values. 75 00:06:10,039 --> 00:06:13,659 In the interactions between the legislature and the executive, public values often are 76 00:06:13,659 --> 00:06:17,050 dealt with separately, as feel good concepts. 77 00:06:17,050 --> 00:06:24,050 Who could oppose to privacy, safety, punctuality, accessibility, reliability, etc? 78 00:06:25,159 --> 00:06:29,779 We'll see in later steps how this can be problematic. 79 00:06:29,779 --> 00:06:36,740 In normative theory, how things should go, these entities are an instrument for their task. 80 00:06:36,740 --> 00:06:42,900 Departments are set up, and their role is to translate the broadly formulated feel-good-concepts from parliaments 81 00:06:43,000 --> 00:06:47,600 into more focused instruments of intervention. 82 00:06:47,620 --> 00:06:51,779 In reality less productive mechanisms are at play as well. 83 00:06:51,779 --> 00:06:58,020 We see the politics of bureaucracy in action, organizations struggling for budgets, legitimation 84 00:06:58,020 --> 00:06:59,229 and influence. 85 00:06:59,229 --> 00:07:06,229 We see goal displacement, where the original intent for the agency is substituted by the 86 00:07:06,439 --> 00:07:10,430 agency drawing its own course. 87 00:07:10,430 --> 00:07:17,430 In the third step agencies go to works, based on the policies. 88 00:07:18,099 --> 00:07:25,099 The general justice system, specific regulators of sectors, markets or specific public values 89 00:07:25,449 --> 00:07:31,620 like safety, they all oversee providers of infrastructure related services. 90 00:07:31,620 --> 00:07:36,199 They direct and measure the performance of the providers on a specific set of parameters 91 00:07:36,199 --> 00:07:42,590 related to public values and develop positive and negative incentives to secure the public 92 00:07:42,590 --> 00:07:46,949 values in the management and operation of the providers. 93 00:07:46,949 --> 00:07:52,979 Market regulators look at competition disturbing behavior, safety inspectorates at potentially 94 00:07:52,979 --> 00:07:56,279 dangerous operations. 95 00:07:56,279 --> 00:07:58,830 Regulation of providers has proven hard. 96 00:07:58,830 --> 00:08:04,059 Providers know their infrastructure systems much better then their overseeing regulators. 97 00:08:04,059 --> 00:08:09,460 They can use that information to their strategic advantage. 98 00:08:09,460 --> 00:08:14,520 The last step is delivery: providers offer their service to the consumer. 99 00:08:14,520 --> 00:08:19,169 This is where the provider has to make good on the promise of the feel-good-concepts, 100 00:08:19,169 --> 00:08:22,749 as discussed earlier in this circular chain. 101 00:08:22,749 --> 00:08:25,650 This is also where the trade-offs become most apparent. 102 00:08:25,650 --> 00:08:32,650 A railway operator has to be punctual, safe, cheap, clean, quick, all at the same time, 103 00:08:32,650 --> 00:08:36,300 and has to make a trade-off between all these. 104 00:08:36,300 --> 00:08:38,500 Obviously this is a simplification. 105 00:08:38,500 --> 00:08:43,450 The "department" and "provider" sectors of the circle are layered in themselves. 106 00:08:43,450 --> 00:08:50,450 The executive department consists of bureaucratic entities, from the ministry or department itself 107 00:08:50,470 --> 00:08:57,030 to other agencies like inspectorates and quango's, police and justice, transport authorities 108 00:08:57,030 --> 00:09:00,680 and telecommunication regulators. 109 00:09:00,680 --> 00:09:08,200 Some of these agencies are related to a specific public value, like privacy, safety or market watchdogs. 110 00:09:08,200 --> 00:09:14,380 Some have broader tasks, like a general department. 111 00:09:14,380 --> 00:09:16,870 Also providers are layered and multifaceted. 112 00:09:16,870 --> 00:09:21,310 In many infrastructures we see a distinction between providers of infrastructure capacity 113 00:09:21,310 --> 00:09:27,540 (network manager) and providers of a transport service (transport operators). 114 00:09:27,540 --> 00:09:32,370 In infrastructure manager and transport operators often are different entities in different 115 00:09:32,370 --> 00:09:38,660 geographical levels and areas. 116 00:09:38,660 --> 00:09:42,540 What happens to public values through this circle? 117 00:09:42,540 --> 00:09:49,540 First of all, the feel-good-concepts are translated to more operational measures of performance. 118 00:09:49,800 --> 00:09:54,800 In that process they become sharper instruments for intervention, for all the departments to use, 119 00:09:54,800 --> 00:09:57,760 but they also become more narrow. 120 00:09:57,760 --> 00:10:02,910 This allows for strategic behavior of the provider, possibly missing the original intent, 121 00:10:02,910 --> 00:10:07,400 and sometimes developed without regard for the operational complexity. 122 00:10:07,400 --> 00:10:11,260 Let's look at an example: 123 00:10:11,260 --> 00:10:17,070 Punctuality makes sense as a feel-good-concept. 124 00:10:17,070 --> 00:10:22,380 But to secure it the department has to secure it through operationalization: 125 00:10:22,380 --> 00:10:26,710 for example the percentage of busses departing within three minutes of the scheduled departure 126 00:10:26,710 --> 00:10:33,690 time, with a penalty when the percentage is below 90 percent. 127 00:10:33,690 --> 00:10:39,470 Now the provider of bus services can cancel bus services that are running late, to reach 128 00:10:39,470 --> 00:10:42,600 the performance threshold and avoid the penalty. 129 00:10:42,600 --> 00:10:49,600 Or the operational speed might be reduced to meet the punctuality demands, or the providing 130 00:10:49,670 --> 00:10:53,600 operator might be penalized because of growing congestion, 131 00:10:53,600 --> 00:10:56,820 something that he has no influence over. 132 00:10:56,820 --> 00:11:03,800 It shows how important a good operationalization is, and how hard it can be to find the right measure. 133 00:11:03,800 --> 00:11:12,700 Second, the separate values go separate paths, from adoption as separate feel-good-concepts 134 00:11:12,720 --> 00:11:19,720 in parliament, through laws, agencies, contracts, licenses, and the management of the provider. 135 00:11:20,350 --> 00:11:26,680 Eventually, in the operation of the provider, all public values have to be delivered upon: 136 00:11:26,680 --> 00:11:33,680 the services have to be safe, clean, accessible, reliable, affordable, and much more. 137 00:11:34,850 --> 00:11:38,890 All the interventions aimed to secure separate pubic values come together in the way that 138 00:11:38,890 --> 00:11:44,610 the trains are run, the servers are set up, the water is delivered, the sewerage it disposed off. 139 00:11:45,500 --> 00:11:51,510 Providers are coping with various conflicting interventions, if only in the way that the 140 00:11:51,510 --> 00:11:58,000 provider is spending its limited funds to comply with all these different values. 141 00:11:58,070 --> 00:12:06,200 Often the conflicts are more direct, for example the demand on availability and speed in public transport. 142 00:12:06,400 --> 00:12:12,500 Stopping the bus a lot improves availability, passengers can get on on more places, 143 00:12:12,500 --> 00:12:18,200 but it harms operational speed, simply the bus has to stop more and goes slower. 144 00:12:18,200 --> 00:12:25,200 So, the different paths to secure various public values all come together in the operation of the provider. 145 00:12:25,200 --> 00:12:31,200 This adds to the already complex situation, technical situation, operational situation, 146 00:12:31,200 --> 00:12:35,120 of providing the service. 147 00:12:35,120 --> 00:12:41,550 Third, public values are secured in laws, secured though agencies, defined in contracts, 148 00:12:41,550 --> 00:12:44,180 concessions or licenses. 149 00:12:44,180 --> 00:12:49,160 Various public values have found a specific institutional form in which it is secured, 150 00:12:49,160 --> 00:12:52,860 in a relatively stable system. 151 00:12:52,860 --> 00:12:57,930 The reality of performance of infrastructures leads to constant attention for different 152 00:12:57,930 --> 00:13:03,160 public values and subsequent tinkering on these institutions. 153 00:13:03,160 --> 00:13:08,750 A lot happens to public values from the feel-good-concept to the operation of the provider. 154 00:13:08,750 --> 00:13:13,900 Often this lead to the outcomes being hard to recognize from the perspective of the original intent. 155 00:13:13,900 --> 00:13:20,930 Consumers feel a disconnect from the promises that they were made when they were voters. 156 00:13:24,000 --> 00:13:28,850 In this module we looked at public values in a bit more detail. 157 00:13:28,850 --> 00:13:35,380 Securing public values is done in various types of institutions; public values in the 158 00:13:35,380 --> 00:13:39,940 public debate are often feel-good-concepts, with a great deal of current debate on separate 159 00:13:39,940 --> 00:13:46,940 values and the attention they need to get; public values go to a transformation process 160 00:13:47,260 --> 00:13:52,930 from that feel-good-concept to explicit measure of performance. 161 00:13:52,930 --> 00:13:59,930 In operation, many of these measures of performance condition the operation and might conflict. 162 00:14:01,370 --> 00:14:06,500 If you are of will be working in one of the mentioned roles, I hope the overview provided 163 00:14:06,500 --> 00:14:11,500 you with some help and understanding the fragmentation of the sector 164 00:14:11,500 --> 00:14:15,610 and how that hinders securing public values in infrastructures. 165 00:14:15,610 --> 00:14:20,560 And I hope it helps you to have a more integrated perspective on the process and will lead to 166 00:14:20,560 --> 00:14:24,500 better results in the infrastructure sectors we're looking at, thanks!