Unpacking value destruction

Image of the hands of two people sitting across the table
  • Published Date: 03 May 2022

Public services do not always create value. When poorly organised or delivered, they can destroy value and make service users' lives worse. A research paper in Public Administration examines value destruction from the perspective of both public value and private value in public service environments. It develops a framework that accounts for the types of value destruction and the tension between public and private value. 

What is public value?

The notion of public value derives from academic Mark Moore. He articulated public managers' responsibility for creating something substantively valuable for society following a doable, sustainable, and legitimate strategy. This encapsulates what the public values as well as adding value to the public sphere.

Public value theory shifted the New Public Management’s emphasis on public service organisations and the role of the market to public services' external impacts on society. It has explored collective benefits rather than individual ones in public service delivery. In essence, public value is about the broader impact of public services on society and the collective good.

What is private value?

The creation of value at the private level focuses on individual service users and citizens. There are three dimensions to such value creation:

  1. The impact of engagement in the design and management/delivery of a public service (value-in-production).
  2. The experience of using a public service (value-in-use).
  3. The relationship of these services to the individual life experiences, needs and expectations of service users (value-in-context).

About value destruction

Three sources of public value destruction have been identified. These are where:

  1. Some citizen groups may be excluded, rejected, or even sacrificed in the creation of value for the broader society.
  2. Public services are captured by individuals or groups, limiting access for the general population.
  3. There is disagreement/conflict between different stakeholder groups about the nature of public value, where public value is ill-defined or where the debate is captured by an elite group.

Private value destruction results from:

  1. Power asymmetries between public service providers and users.
  2. Resource misuse, when public service providers, users, and other actors cannot effectively use and integrate the resources they possess in a mutually and socially beneficial manner.
  3. Misaligned behaviours between actors due to lack of trust and information failure.

Case studies of value destruction in public services have emerged in fields such as e-government, elderly care and robotics, and health care.

About the research

The paper explores value destruction at the intersection between public and private value and investigates the potential that they can conflict with each other—to actually destroy, rather than create value. 

The research explored value creation across a number of dimensions including a multi-case study method of four public carbon reduction projects in urban areas. The methodology involved 38 in-depth semi-structured interviews and reviewing 121 files of documents.

Interview respondents were selected from across the public, private, and social/community sectors and included project directors/co-founders, Council leaders, senior/junior public officials, and project staff. The documentary data included policies, news reports, project reports and other archival data.

What the research found

The research identified 14 examples of value destruction. These included:

  • the sacrifice of private value to create public value
  • conflict between public value and private value creation, such as when a program to encourage cycling by building cycle paths was opposed by politicians concerned about alienating key voters.
  • disagreement among the key actors jeopardising the public–private partnership and threatening both public and private value creation
  • value creation seen as a marketing device rather than a substantive endeavour, undermining its achievement, as occurred in ‘carbon literacy’ campaigns.

The case analysis led to the following typology of value destruction:

  • value failure where the creation of public and/or private value was ultimately hampered or blocked

  • value decline where which public and/or private value was diminished and/or destroyed.

Although both value failure and value decline are examples of unsuccessful value creation, they are conceptually different. Failure denotes the non-performance in regard to expected value targets, while decline relates to not only the suspension/prevention of new value creation but also the decay of pre-existing value.

What this means

Value destruction is not an aberration in public service delivery but an inherent element. Public services are delivered within dynamic public service ecosystems. They address multiple value creation objectives (often for multiple stakeholders), across the public and private value continuum, and at different points in the service delivery process. Given such complexity, it is unsurprising that destruction is normal rather than divergent.

Unless considerations of public and private value creations are embedded within public policy, value destruction will almost certainly occur in the production of public services. Practitioners need a clear understanding of how value destruction occurs and how to resolve these occurrences.

Want to read more?

Unpacking value destruction at the intersection between public and private value - Tie Cui and Stephen P. Osborne, Public Administration, April 2022

Each fortnight The Bridge summarises a piece of academic research relevant to public sector managers.

SIGN UP FOR THE BRIDGE

Recent Research Briefs include: