Shared performance targets for the horizontal coordination of public organizations: control theory and departmentalism in the United Kingdom’s Public Service Agreement system

Abstract

Coordinating organizations horizontally is a longstanding difficulty of public governance, often called departmentalism in central government systems. Several tools for horizontal coordination have previously been analysed but shared performance targets across departments have received relatively little attention. This article develops a control theory of shared performance target systems for horizontal coordination of departments consisting of ‘director’ (shared objective and target setting), ‘detector’ (shared monitoring of progress), and ‘effector’ (shared feedback to promote achievement of targets) components. The theory distinguishes between two kinds of shared targets: those promoting sequential coordination and simultaneous coordination among departments. The expectations of control theory are assessed for the Public Service Agreement (PSA) adopted in the United Kingdom. PSAs enabled a step change increase in discussion of shared policy objectives across departments. However, despite these benefits, the fundamentally separate broader ministerial and departmental accountability structures led to the setting of vague outcome targets, underdeveloped performance reporting, and fragmented delivery arrangements for shared targets. Points for practitioners The findings provide a cautionary tale for policy-makers seeking to implement horizontally shared targets across departmental organizations. The UK Government’s Public Service Agreement (PSA) system reveals that shared target systems for departments supervised by a finance ministry are a useful tool for incentivizing departments to collaborate with other departments in policy discussions and resource allocation. However, it was difficult for departments to set specific cross-cutting targets and to develop practical joint delivery and performance reporting strategies across existing departmental boundaries. The effects of the system were, for the most part, counteracted by departmentally focused resource and accountability structures. In some cases, broader structural reform to reorganize departmental structures to align with the formerly cross-cutting policy challenge was necessary rather than predominantly relying on shared targets to pursue policy goals.