LPG and the Changing Administrative Role
Liberalisation, privatisation and globalisation, and why public responsibility remains.
Paper I Unit 1 Introduction with a link to Paper I Unit 8 Development Dynamics
Separate the three processes
| Process | Meaning | Administrative consequence |
|---|---|---|
| Liberalisation | Relaxing selected economic restrictions and controls. | Redesign permissions improve transparency and regulate remaining risks. |
| Privatisation | Transferring public ownership or control to private actors. | Assess public obligations competition transition and accountability. |
| Globalisation | Greater cross-border connections in trade finance technology people and ideas. | Develop coordination expertise and responses to transnational opportunities and risks. |
A sale of a minority government shareholding is not automatically privatisation: control may remain public. Corporatisation changes an organisational or legal form and need not transfer ownership. These distinctions matter because different changes require different administrative safeguards.
Less direct production can require more capacity
When government stops producing a service directly, it may need to specify standards, select providers, monitor performance, regulate market power and ensure access. These tasks require expertise and information. The scope of one type of activity can decline while the demands on other functions increase.
Change in the mode of public provision β Regulation and fair competition + Contracts and performance oversight + Access rights and citizen remedies β Public responsibility for service outcomes
Changing the provider changes the instruments of administration; it does not automatically remove public responsibility.
A service example
Suppose a municipality hires a private firm to collect waste. It still needs to define coverage, check whether difficult neighbourhoods are served, verify complaints and pay against credible evidence. If only collected tonnage is rewarded, the firm may neglect cleanliness or segregated handling. The administrative issue becomes the design and enforcement of the service relationship.
The governance connection
Government refers to public institutions with lawful authority. Governance refers more broadly to the arrangements through which collective problems are addressed, including relationships with firms, civic groups and communities. It does not imply that state authority or democratic responsibility has become unnecessary.
Evaluate reforms through efficiency, public access, regulatory quality, capability and accountability. Avoid assuming either that market provision always solves government failure or that direct public provision is always preferable. The comparison should be between workable arrangements for a particular task.
Paper II Unit 3 Public Sector Undertakings examines ownership and autonomy. Paper II Unit 12 Urban Local Government and Paper II Unit 14 Significant Issues in Indian Administration provide settings for regulation and citizen accountability.
Why can liberalisation increase the need for a capable public administration?
Answer direction Explain the shift towards regulation contracting information and protection of public access while distinguishing these functions from direct provision.
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