Public Money & Management

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Paradoxes and prospects of ‘public value’

Colin Talbot

To cite this article: Colin Talbot (2011) Paradoxes and prospects of ‘public value’, Public Money &
Management, 31:1, 27-34, DOI: 10.1080/09540962.2011.545544

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Published online: 24 Jan 2011.

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 27

Paradoxes and prospects of

‘public value’
Colin Talbot
This article explains where we are with public value, how we got here and where
we should go with it. It suggests a re-conceptualization that incorporates self-
interest, public interest and procedural interest as the fundamental bases of public
value creation. It goes on to suggest ways in which this could be operationalized
using a ‘scorecard’ approach.
Public value has both an intrinsic and a only in the past few years that it has been Colin Talbot is
contingent interest: intrinsic because of the steadily gaining adherents and interpreters in Professor of Public
challenge it presents to the validity of some of the UK. Public value is clearly becoming Policy and
the thinking behind the new public fashionable among think-tankers and policy- Management,
management (NPM) of the 1980s and 1990s; makers (for example Kelly et al., 2004; Horner Manchester Business
and contingent because of the rise of interest in and Hazel, 2005); and a small but significant School, UK.
public value in influential parts of public policy academic literature has also begun to emerge
communities. Public value essentially tries to (Davis, 1998; Gupta, 2002; Smith, 2004;
weld together ideas about efficiency and O’Flynn, 2005; Stoker, 2005; Talbot, 2006).
effectiveness in the provision of public services Public value is not universally popular and
with notions of democratic legitimacy and has been subject to attack (Elstein, 2004). One
trust—in some ways it could be seen as a specific criticism is that public value assumes
synthesis of older public administration and that public managers are purely public spirited
public interest ideas with aspects of NPM. Public and imbued with the ‘public interest’. This
value is certainly not yet a new paradigm in the ignores the possibility of self-interested action
sense that it has not yet captured the policy by public managers, or indeed that their view
agenda in the way that NPM arguably did in of the public interest may not coincide with that
some countries, but it is certainly becoming of elected representatives (Walker, 2006).
influential enough in policy-making and In UK public policy terms, there has also
academic circles to merit further attention. been one noticeable absentee from the ranks of
Public value, like most modern social science the public value advocates: HM Treasury—an
(Barkow et al., 1995; Wilson, 1998; Pinker, important omission. Treasury largely absented
2002), shies away from examining the itself from the discussions organized by the
assumptions it implies about human nature (as Cabinet Office Strategy Unit in 2001/02, despite
does rational choice economics). This article some ministerial support, which led up to the
confronts this omission and provides a first version of their ‘public value’ paper (Kelly
grounding of public value in our evolved and and Muers, 2002) and they have apparently
contradictory human nature (Talbot, 2005a). remained sceptical.
The article also addresses the problem of The policies of the new coalition
operationalizing public value for research and government in Britain on ‘performance’ remain
policy use by proposing a public value scorecard. in a state of flux. Some aspects of New Labour’s
This is an ambitious agenda for a single ‘targets’ have been dispensed with, but other,
article and some of the argument is necessarily modified, forms of performance reporting seem
somewhat telegraphic. It is essentially a sketch destined to survive. It is as yet unclear if public
for wider lines of enquiry, which may become value will figure at all in their thinking.
increasingly important if and when public value Public value should not be seen in
becomes a more pronounced phenomenon isolation—it is only one of a number of American
nationally and internationally. ideas that have challenged NPM. From
defenders of traditional public administration
Background—transatlantic policy transfer (Goodsell, 1994), challengers of technocratic
The most influential work on public value— performance management (Radin, 2006), to
Mark Moore’s Creating Public Value—was advocates of the ‘new public service’ (Denhardt,
published in the USA in 1995. However, it is 2000; Denhardt and Denhardt, 2002) a number

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of alternatives have been floated. Indeed, in This argument has been described by some
many ways the book which heavily influenced as tautological—public value is what the public
the Clinton administrations, Reinventing values. However, in this sense it is not really any
Government (Osborne and Gaebler, 1992), was different from ‘private value’. In the private
itself far from pure NPM in its diagnosis or sector, the customers (people) and their choices
policy recommendations. determine the value of any product or service.
So why has public value been attracting so It doesn’t matter how much is spent on creating
much attention? There are many possible it, if customers don’t want it, it is valueless. The
explanations. The relentless search for the same is true in the public sector, but here the
latest new big idea is just as strong in the public ‘customer’ is the whole citizenry. It is the
sector as it clearly is in the private domain combined preferences of the whole people that
(Pfeffer and Sutton, 2006). The previous new decide whether or not any public domain
paradigm, NPM, is well past its sell-by date and activity is creating or destroying value.
public value, some would argue, is the The main alternative view to this is the
management paradigm best suited to the new objectivist one, most notably developed by Karl
‘networked governance’ of the UK (Newman, Marx in his ‘labour theory of value’, in which
2001; Stoker, 2005). ‘price’ and ‘value’ are rigorously separated.
Whatever the precise reasons for the While there may be a grain of truth in Marx’s
emergence of public value as a policy trend, it account (real things are really created and
clearly appeals as an approach, in its various really embody ‘dead labour’), few would doubt
guises, by offering an alternative to the narrow, that, for all practical purposes, value in the
one-dimensional and economistic ideas which private sector is driven by subjective views
underpinned much of the NPM movement of about what constitutes value, however much it
1990s. Public value celebrates the contribution is dressed up in apparently objective accounting
which the public sector can make to the ‘good or asset valuations. The market is by definition
society’, and doesn’t just see it as a necessary subjective, as the recent turmoil in financial
evil: the result of ‘market failure’. But at the markets on a global scale have amply
same time it recognizes the need for efficiency demonstrated.
and quality. Public value seems ideally suited to Public value, then, is the combined view of
the new era of spending reviews and economies the public about what they regard as valuable.
facing much of Europe, Precisely how these, often contradictory, public
Turning to the main ideas, and variations, preferences are combined is a separate issue.
in the public value movement, this article offers In the public value perspective, it must be
a slightly different conceptualization as a basis through some form of representative, and also
for ‘public value’—one which is rooted in the sometimes participatory, democracy as well as
formation of contradictory human nature. It through participation by users. The democratic
will also attempt to demonstrate how public aspect is important to secure the legitimacy and
value can be operationalized, something sadly trust of the people for public activities. And,
lacking from much of the existing literature argues Moore, the very act of obtaining consent
and perhaps a reason for its somewhat slow improves public value. The more people
growth, in the US and the rest of the world, participate in framing public action, the more
thus far. they value the resulting action even if it was not
their personal preference. But as their
Varieties of public value preferences will change over time, so public
Mark Moore’s book sets out the public value activities have to constantly adapt and seek re-
approach in some detail, with many examples. legitimization and renewed trust. Just as
However, it is sometimes opaque in its something which is valuable in the private
definitions and it takes some effort to try to sector today may be valueless in the future—
disentangle both theoretic and operational how many of us have an ‘obsolete’ but fully
aspects of public value as he conceives it. His working computer in their loft which has no, or
basic definition is that: ‘managerial success in very little, realizable value in our society?
the public sector with initiating and reshaping
public sector enterprises in ways that increase Assumptions of public value: self-interest,
their value to the public in both the short and the public interest and procedural interest
long run’ (Moore, 1995, p. 10, emphases added). During the latter half of the 20th century, ideas
In other words, as with the creation of value in from micro-economics about rational choice
the private sector, ultimately it is people who and so-called ‘public choice’ dominated not
decide whether something is valuable or not. only economics, but also invaded other social

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sciences such as politics and public administration. altruism—our concern with what has been called
They also spread from academia into the policy ‘procedural fairness’. In their book Happiness &
communities of mainly ‘anglo’ countries and Economics, Bruno Frey and Alois Stutzer conclude,
provided the intellectual underpinning for on the basis of strong empirical evidence, that
Thatcherism, Reganism and NPM. people value and derive pleasure from
The basic idea is that humans are always and participation in fair and transparent processes,
everywhere ‘rational utility maximizers’ and this whatever the outcome (Frey and Stutzer, 2001).
affects their every decision process from This is a very important finding and counters
economics to politics and even personal much of the NPM lack of concern with public
relationships. In politics and public domain processes. Perhaps the most pure
administration this movement was called ‘public expression of this NPM position, that the public
choice’ (with an offshoot called ‘bureau- are not in the least concerned with processes and
shaping’—see Dunleavy, 1991; James, 2003) and procedures and only in what they get from
it is sought to displace older ideas about ‘public public services, was made in a widely-cited speech
interest’. by a prominent UK government minister in the
Public interest has a long history, dating early 1990s (Waldegrave, 1993).
back to Aristotle, including in the last century Frey and Stutzer argue that it is the modern
many advocates of public administration’s role democratic polity which most provides
in securing the public interest (Bozeman, 2007). procedural fairness, and that, within democratic
More recently, there has been something of a polities, those with the greatest direct
surge in writing defending public interest (for participation are perceived as more fair than
example Moore, 1995; Denhardt and Denhardt, others. Using numerous empirical examples,
2002; Radin, 2006). As Bozeman’s subtitle— and in particular some interesting analysis of
Counterbalancing Economic Individualism— differences between (usefully comparable) Swiss
suggests, there is not necessarily an either/or cantons, they show that representational
choice between self-interest and public interest. democracy as a key procedural element in public
Rather, there may be a way of addressing these services increases happiness. They also
issues, and their roots in human nature. demonstrate that the more participatory systems
Indeed, in recent years a counter-revolution seem to produce even greater satisfaction with
has been occurring in thinking about human the procedural aspects of the public domain,
nature and human motivation. In micro- even when individuals do not get their self-
economics, evolutionary psychology, public interests or their public interest preferences
policy and several other fields, the idea that satisfied. Procedural interests thus, it should be
humans are both self-regarding and altruistic, noted, to some extent synthesize self-interest
social, animals has taken root and been reinforced and public interests.
by both empirical and theoretical developments. It is possible to hypothesize that this aspect of
As the ethicist Peter Singer put it succinctly, ‘we human nature is also evolved, but not in quite the
were social before we were human’ (Singer, same way as altruism and self-regarding
1999). behaviours. A branch of rational choice theorizing
In this perspective, then, humans are both has attempted to explain the ‘evolution of co-
self-regarding and other-regarding, selfish and operation’ and even altruism (Axelrod, 1985)
altruistic. Significant numbers of academics across using game theory approaches which
a range of fields have explored this idea, including demonstrate that iterative interactions may lead
in management and organization studies (Quinn, to the evolution of what are, in effect, rules for
1988; Quinn and Cameron, 1988; Quinn et al., procedural fairness. Individual ‘players’ may
1996), public policy (Le Grand, 2003), economics not get what they want in any particular ‘round’
(Margolis, 1982; Mansbridge, 1990), in of the game, but if they feel the rules (institutions)
evolutionary psychology (Sober and Wilson, are operating fairly they will continue to co-
1998), ethology (de Waal, 1996) and even in operate. This is of course cultural, rather than
attempts to bring them all together into unified biological evolution, but it is equally universalistic
explanatory frameworks (Fiske, 1991; 2004; in application—and it may be at least partially a
Talbot, 2005a). Management consultants and consequence of gene-culture co-evolution
gurus have also joined in the discussion (Peters (Wilson, 1975; Ehrlich and Ehrlich, 2008).
and Waterman, 1982; Handy, 1995; Harvey, Interestingly, the performance measurement
1996; Price Waterhouse Change Integration movement within public services has been in
Team, 1996). part justified as an increase in accountability and
There is another aspect of human nature participation (Talbot, 2005b). A policy statement
that is important beyond selfishness and by the UK’s Labour government about the

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introduction of public service agreements concerns with redistribution to achieve greater

(PSAs—a form of performance reporting by equality can likewise conflict with the same
central government departments) makes this individual’s self-interest. For example, the
explicit: ‘The publication of PSAs represents a demand for higher levels of public provision in
fundamental change in the accountability of areas like health and education conflict with an
government to Parliament and the people’ individual’s interest in lower taxes. There is
(Treasury, 1998, p. 2). ample opinion poll evidence that the same
However, Pollitt suggested that a key gap in individuals display simultaneous public interest
this performance measurement movement has and self-interest views (Ipsos MORI, 2007).
been precisely the absence of an active role by
democratic institutions and political processes Self-interest versus procedural interest
(Pollitt, 2006). Public value potentially addresses Representative and participative forms of
this gap through its emphasis on legitimacy and providing for procedural interest are both devices
trust, re-establishing the idea that in a democratic for aggregating preferences in ways which
polity it is not just individual benefits from services inevitably conflict with the self-interest of at least
or outcomes, or public interest benefits, but also some individuals. Minorities often fail to satisfy
the procedures by which they are shaped and their self-interests, while achieving procedural
decided upon which determine the utility of interest. In some cases, the ‘Abilene Paradox’
public services performance (see also Radin, (Harvey, 1988) can occur—collective decisions
2006). can end up disadvantaging everyone involved to
Public value potentially captures all three of some degree.
these—self-interest, public or social interest and
procedural interest—in a single framework: Procedural interest versus public interest
Efforts are continually made to provide for
•Self-interest captures the need for public services procedural fairness, but this can equally
to provide good quality and efficient services frequently come into conflict with perceived
at an optimum price to both the taxpayer/ public interest. Examples might include when
citizen and the ‘customer’. justice systems become slowed down by
•Public interest stresses the social outcomes aspects procedural rules causing distress to victims and
of public services—providing taxes and accused alike, or when criminals are perceived to
legitimacy for ‘common good’ activities that ‘get away with it’ due to ‘technicalities’. Likewise
improve the welfare of all citizens (and have attempts to provide for greater participation to
an inherently redistributional content). satisfy procedural interests (Frey and Stutzer,
•Procedural interest emphasises the need for equity, 2001) may be seen as running counter to the
fairness and due process in the way in which public interest by slowing decision-making,
people get to participate in shaping public producing perverse results and being too costly
decisions and even individual services. without sufficiently compensating benefits (Cooke
and Kothari, 2001).
It should be stressed that these are not about
different interests expressed by different groups Understanding public value
or individuals—these three sets of interests can The balance of self-interest, public and procedural
be displayed by the same individuals at the same interest, which creates public value will likely
time. This answers the paradox that people change over time, over services and between
genuinely, and with often altruistic motives, cultures, but with all three always being present
support more public provision or calls that to some degree (see figure 1). It is tempting to
‘something must be done’; demand appropriate suggest that any strong movement towards
procedural fairness, however inefficient; and at privileging one set of interests could be met with
the same time demand less taxation. This happens countervailing pressures towards the other two.
because people have all three sets of motivations. There will also doubtless be institutional and
cultural influences on the precise balance and
Public interest versus self-interest shaping of these preferences in any one time and
Potential conflicts between self-interest and public place. In the USA, for example, cultural and
interest are not difficult to find. Individual users institutional factors probably explain why public
of public services who demand ‘customer’ rights interest is often expressed in non-state forms
to choice, flexibility in service etc., clearly (voluntary contributions and actions), whereas
potentially conflict with public interest concerns in Europe it is more likely to take a state-based
about equity in the output and outcomes of nature (tax and spend), although in both cases
public services. An individual’s public interest there is significant altruistic action in both state

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and voluntary sectors (Pharr and Putnam, 2000). approach is possible (Talbot, 2006).
What does this conceptualization add to Public value may indeed be particularly
public value? First, it paces public value firmly in relevant in networked governance circumstances,
the same territory as the rational choice and but it is not only applicable there. One of the
public choice approaches which underpinned benefits of public value therefore may well be
the NPM movement. Rational and public choice that it potentially embraces a far wider spectrum
theories are based upon assumptions about of public domain institutional arrangements than
human nature, even if their proponents do not either public interest or public choice approaches.
usually conceptualize their theories in this way.
By providing an alternative view of human nature Operationalizing public value—a scorecard
which encompasses self-interest, public (altruistic) approach
and procedural interests this approach provides Mark Moore noted that ‘we have no way to
a much more secure foundation for approaching conduct a rigorous test of what managerial
public value. practices are better than others’ (1995, p. 10).
Second, while this approach does not directly A reliable conceptual framework, and some
provide a way of operationalizing public value, way of developing metrics of performance
the notions of combining self-interest, public against the elements of such a framework,
and procedural interests do make a very therefore seems necessary to provide a guide to
important contribution. By emphasising the public managers and others seeking to create
conflicting interests and values that have to be public value. How might such a task be
satisfied within any framework for evaluating approached?
public value, a far more realistic model can be Balanced scorecards, and the associated
created, as will be demonstrated below. disciplines of strategic mapping and
performance management (Kaplan and
Prospects for and benefits of public value Norton, 1996, 2004), may provide a useful
Given the above conceptualization, what are the conceptual framework for operationalizing
benefits of a public value approach? In Moore’s public value. The scorecard approach suggests
formulation of public value—as being a balance that for—mainly private sector—organizations
between achieving trust and legitimacy, provision there are four foci: innovation, financial,
of services and social outcomes—there is clearly internal processes, and customers—which are
an attempt to balance the competing values of permanent features of private value creation
self-interest, public and procedural interest, if (although, of course, Kaplan and Norton do
not stated in exactly these terms. Moreover, not use the term ‘private value’). A scorecard
given the fluidity of the way in which self-interest, provides the conceptual framework within
public and procedural interests interact, public which metrics can be developed. More
value is seen as a dynamic answer which constantly importantly, however, the scorecard approach
has to, and can, evolve to meet changed conditions stresses the trade-offs and balance that has to
for its realization. be achieved between the four foci—they can be
While Stoker (2005) specifically ties public both mutually supportive but also, and crucially,
value to networked forms of governance, this is mutually undermining depending on the way
an overly restrictive approach. Not all public the relationships between innovations, financial,
domain activities fall within the definitions of
‘networked governance’ and some areas of public Figure 1. Public value—balancing interests.
activity are, and will likely remain, bureaucratic
in form—such as social security payments, tax
collecting and prisons (Osborne and Gaebler,
1992). These types of organizations could be Public
unnecessarily excluded from application of a Interest

public value policy approach. In Moore’s work

there are many examples of the concrete
application of public value which include precisely
more traditionally hierarchical and bureaucratic Public
forms of public organization (Moore, 1995). Value

Similarly, an attempt to apply a public value

Self Procedural
framework to reform of a public administration Interest Interest
system which is still very much traditionally
hierarchic in nature—in the Republic of
Macedonia—demonstrates that such an

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internal processes and customers are managed. •First, it is a template into which any strategic
In short, they can lead to creative tensions or content—including diametrically opposite
destructive conflicts. This is clearly a similar ones—can be poured.
approach to Moore’s public value ‘strategic •Second, it is highly interactive and non-
triangle’. linear—each focus can have positive
However, the balanced scorecard itself is reinforcing or negative undermining effects
clearly not suitable for applying to public value on the others, involving iterative feedback
creation, conceived as it was in the private loops.
sector. Recent research on UK public •Third, it is particularly useful in dealing with
organizations using balanced scorecard public organizations which can be viewed as
approaches found that although all eight case complex adaptive systems—where linear
study organizations used scorecards, none of performance approaches can be extremely
them were the actual Kaplan and Norton misleading (Axelrod and Cohen, 1999).
balanced scorecard and they were all ‘home
grown’ and different from one another (Talbot So how does this relate to the self-interest,
and Johnson, 2005). public and procedural interest discussed above?
Moore’s original conceptualization It is possible to map these interests against the
included three main elements: suggested five foci to illustrate the different
emphasis each gives to any particular focus
•Creating trust and legitimacy in their (see table 1).
enterprise. The results show clearly the sort of tensions
•Improving operations and services. that have to be traded off or balanced in
•Envisioning the social results which managers creating public value. It clearly captures many
are expected to focus upon in creating public familiar dilemmas in public management and
value (Moore, 1995 pp. 71–76). provides a useful analytical framework for
thinking about the main aspects of public value
The UK’s Strategy Unit effectively added two creation.
extra dimensions or ‘foci’—resources; and To illustrate with an example. Social results
processes (Kelly and Muers, 2002). However, from a self-interest perspective are primarily
neither suggested at this stage any sort of in the ‘what’s in it for me or my family?’ mode,
‘scorecard’ approach. (Moore subsequently whereas public interest is more concerned
proposed a scorecard based on the PV with genuinely social impacts. From the
approach, in a 2003 paper, but for reasons I procedural interest viewpoint, it is the process
will not explore in this article his proposed of deciding on social and community results
scorecard is not adopted here.) which is crucial, rather than (or as well as) the
If we combine these five elements (three actual results themselves. Each interest
from Moore and two from the Strategy Unit) emphasises different, legitimate, aspects of
and change the language to one of ‘focus’ (as in social results and public value is about achieving
the original balanced scorecard) and a public the maximal satisfaction of, or balance between,
value scorecard is created (see figure 2). all three at any particular time.
Important points to note about such a A topical policy debate in the UK about
scorecard (as with Kaplan and Norton’s version) education reform illustrates the utility of this
are: approach even further. The government
Figure 2. Public value creation framework. proposes to introduce greater diversity
amongst school types and more choice for
parents in selecting schools (self-interest). The
opponents of the reforms point to possible
inequity and social division issues (public
interest) and the attempted compromise
focuses on the procedure and degree to which
schools can exercise choice (procedural
interest).

Conclusion
It is clearly too early to tell if public value is of
sufficient interest to policy-makers and
practitioners, even in the UK, for it to take off.
  It is, however, not too early to see that public

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Table 1. Map of interests against the five foci suggested in this article.

Self-interest Public interest Procedural interest

Trust and Respect for individual rights, Respect for democratic Respect for democratic and
legitimacy complaints and restitution, and consultative decisions consultative processes
focus and confidentiality

Resources focus Are purchased in economic Are purchased in socially Are purchased in fair,
and competitive ways useful ways (for example fair transparent and honest
trade, fair wages, locally etc.) ways

Processes focus Are flexible and responsive to Are equitable, responsive to Are formalized, fair,
individual wants and efficient democratic control and are transparent and honest
effective

Services focus Are delivered in flexible, cost- Are delivered in socially Are decided in democratic
effective and efficient ways with equitable and effective ways and participative ways
choice for individuals

Social results Are delivered in cost-effective ways Are delivered in equitable ways Are decided in democratic
focus which enhance individuals’ lifestyles which enhance social justice and participative ways

value potentially offers a very different chapter 6 of my new book, Theories of Performance
theoretical and practical approach to the (Talbot, 2010). This extends, rather than
understanding and practice of public replaces, the idea of balancing competing public
management than either the older public values. I would now also modify somewhat my
administration or the NPM traditions. view of ‘value’ to include both ‘brute’ value and
The approach in this article to subjective valuations, which is also discussed at
underpinning public value with a view of human length in the new book. ■
nature is clearly not absolutely necessary to
accept public value as such. But the References
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