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The loss of capacity in public organisations

6 April 2021



Budget cuts, organisational reforms and political subterfuge have challenged public sector organisations. A paper in Perspectives on Public Management and Governance discusses how these can contribute to a loss of capacity and the implications of this loss.

Capacity building vs capacity loss

The issue of capacity-building is more commonly discussed than capacity loss. When new agencies are created or new statutory responsibilities are assigned to public organisations, there is an appreciation they need the requisite capacity to achieve those responsibilities. However, capacity loss has received much less consideration.

This is because loss of capacity is less obvious and often manifests itself only in hindsight after an accident or failure. The erosion of an existing capacity can be difficult to ascertain, particularly if it arises inadvertently or by political subterfuge.

Related research:

What is capacity?

The paper defines capacity as “the agency’s practical ability to achieve its legally mandated mission”.

Whether intentionally or inadvertently, organisational capacity can be lost through:

  • neglect
  • reorganisation
  • reprioritisation
  • misdirection
  • demoralisation.

This makes it difficult for public organisations to fulfil their missions when called upon to do so.

Capacity as an ensemble

An agency’s capacity can often be thought of as:

  • the ability to develop, direct, and control its resources to support the discharge of its policy and program responsibilities.

A capacity typically requires experienced practitioners who command:

  • the requisite skills
  • financial resources
  • agreed upon coordinating procedures
  • enabling physical resources.

Capacity is operational only after it is “worked up”. The ensemble nature of capacities offers insights into the implications of capacity loss. When an agency’s budget and personnel are cut, it may:

  • tighten its belt
  • rely on existing slack
  • cannibalise other resources
  • find new ways of working to maintain performance.

With additional cuts, the organisation may reach a point where its ability to fulfil responsibilities becomes vulnerable. As losses on one dimension occur, they may initiate or interact with losses on other dimensions, producing nonlinear effects.

For example, budget cuts may place stress on staff, training, leadership and resources. This can undercut morale and lead the remaining staff to depart in search of better working conditions.

Four ensemble capacities

The paper identifies four ensemble capacities that may be vulnerable to loss and whose loss may have nonlinear “multiplier effects” on other organisational capacities.

The capacities are:

  • response
  • anticipation
  • monitoring
  • learning.

These capacities are typically central to the adaptive capacity of public organisations: their ability to rapidly reconfigure other capacities and to engage in strategic planning.

1. Response capacity

Public agencies are called upon to act rapidly in response to certain events or situations. Such capacities must stand at the ready even when they are not routinely deployed. They can be difficult to plan for, maintain and justify prospectively.

Response capacities can be difficult to assess. An agency’s actual capacity to respond rapidly is likely to depend on a complex set of situational factors easier to judge in hindsight than in advance. This means we are discovering our lack of capacity after the fact.

2. Anticipation capacity

The capacity to anticipate is critical and frequently underestimated. To act effectively, agencies must anticipate future events, demands and needs.

Anticipation capacities are characterised by their timeframe. A finance ministry must anticipate employment rates and economic growth for the coming fiscal year in order to produce an annual budget. But the same finance ministry may have to make long-term demographic projections.

Successful anticipation requires that an agency have the resources, time and attention to develop both short- and long-term anticipatory views. The capacity for this double anticipatory perspective may be perishable. Long-term anticipation can easily be undermined by a preoccupation with immediate or short-term demands or vice-versa.

3. Monitoring capacity

Monitoring entails the ability to collect information systematically. For example, regulatory agencies typically use inspectors to monitor the compliance of organisations or functions under their regulatory purview.

Monitoring is often closely interwoven with response, anticipation, and learning capacities. These can depend on comprehensive data collection to:

  • take timely action
  • exercise foresight
  • draw meaningful lessons from program evaluation.

4. Learning capacity

To improve their effectiveness, agencies must be capable of learning. Learning requires the ability to harness information about, and draw inferences from past and on-going action and response.

While anticipation capacities are forward-looking, learning capacities are often retrospective. Like anticipation capacities, the need for dedicated learning capacities is easily underappreciated. It is also not necessarily an automatic or natural organisational capacity.

Learning is often among the most politicised aspect of public organisational life because learning has the potential to attribute blame for failure.

What this means

Reorganisation, budget and simple neglect may all lead to capacity loss. Changing environmental conditions or demands can lead to relative capacity decline even when organisational capacities remain stable.

This places a premium on knowing:

  • when a capacity is vulnerable
  • when is a loss likely to be precipitous rather than gradual
  • to what extent that loss is irreversible.

Another issue is the interdependent nature of capacities and when a capacity loss will have cascading or reverberating effects on other capacities.

Understanding these implications can help public organisations address capacity loss with foresight rather than hindsight

Want to read more?

The loss of capacity in public organizations – Christopher K. Ansell et al, Perspectives on Public Management and Governance, Vol. 4, No. 1 2021

The original article is available via individual subscription to the journal or institutional access through a library service such as a university library, state library or government library.

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Published Date: 6 April 2021