Governpreneurship: Establishing a Thriving Entrepreneurial Spirit in Government

Citation

Abigail R. Hall (2015), "Governpreneurship: Establishing a Thriving Entrepreneurial Spirit in Government", Journal of Entrepreneurship and Public Policy, Vol. 4 No. 2, pp. 272-275. https://doi.org/10.1108/JEPP-09-2013-0042

Governpreneurship by Robert D. Hisrich and Amr Al-Dabbagh, offers a perspective on how policy-makers and other government officials may work to establish an entrepreneurial spirit in government. Their central argument is that creating an atmosphere of entrepreneurial activity within governments has become increasingly important in a time of decreased government revenues, economic volatility, and higher expectations from citizenry. They argue that while entrepreneurship is seen primarily as a private sector phenomenon, that entrepreneurship is a universal idea, encompassing both the private and public sector.

The book is divided into seven chapters with four appendices. Chapter 1 discusses the differences between the public and private sector, makes distinctions between entrepreneurship in private and public settings, and looks to develop a more general framework for analyzing public entrepreneurship. Chapter 2 lays out why public entrepreneurship is desirable, discusses specific challenges to public entrepreneurship, and offers ideas as to what actions and behaviors would make government entrepreneurship successful. The third chapter examines the idea of policy innovation and discusses several approaches to achieve this goal. It concludes with examples of these various approaches.

Chapter 4 provides a sort of guide for how to create an innovative public culture. This chapter discusses the difficulties of spawning government innovation and includes ideas on how to create a culture which embraces change. The authors describe how media may influence opinion and offer examples and other ideas on how to engage the community. The goal of Chapter 5 is to provide the reader with a way to navigate problems with “internal and external politics” while looking to encourage public sector entrepreneurship. Chapter 6 puts forth a discussion of coalitions. The chapter includes information regarding the possible benefits of a coalition, the obstacles to forming a coalition, and provides a guide for assessing risk, identifying potential partners, and creating a successful coalition.

The final chapter of the book describes the various ways in which the public sector may finance government entrepreneurship. The authors put forth ideas of private-public partnerships as one potential funding method and discuss the possibilities of using venture capital to generate entrepreneurial activity. The book concludes with four case studies in separate appendices. The cases of Ireland, Singapore, Saudi Arabia, and Geneva University Hospital are offered as success stories of government entrepreneurship and how the ideas presented in the book have been applied in various contexts.

While elected officials are likely to appreciate the message of this book (as indicated by the comments offered in the book’s foreword), those of a more academic mindset are surely to find this book deficient. While the volume provides references to a variety of published works throughout, it fails to provide any significant in-depth analysis. As opposed to offering a deep understanding of one or two particular issues presented, the book attempts to cover a myriad of different topics – each aimed exclusively at praising the ideas of “government innovation.” Though the authors mention the difficulties of public entrepreneurship throughout, they neglect any detailed discussion of the feasibility of what they suggest and pay almost no mind to the existing sharp criticisms of these ideas. For example, the authors argue that public sector organizations should be encouraged to reduce formalization and adopt a more decentralized structure, while offering no discussion of the myriad of reasons why this has not and is not likely to occur. This less-than-thorough treatment is bound to send up “red flags” among many readers.

I find several substantial problems with the arguments presented by Hisrich and Al-Dabbagh. The first of these problems has to do with the authors’ characterization of entrepreneurship. While I am sympathetic the idea that entrepreneurship is a universal characteristic of all human beings, I find the authors grossly misunderstand the fundamental differences between the private and public sector and the function of the entrepreneur. While the authors are correct in their definition of entrepreneurship in saying that entrepreneurs initiate change, assume risk, and spawn innovation, they neglect a substantive discussion of why these things do not happen in the public sector and why the very structure of government enterprises implies the changes they propose have not and most likely will not occur on any consistent basis.

Entrepreneurship functions well in the private sector because of the existence of private property, profit, and loss. The reward of profit signals to an entrepreneur that they are engaging in activities that make society better off. Losses signal the opposite. Private entrepreneurs are steered by this mechanism toward, as the authors note, a positive, welfare-enhancing outcome. Hisrich and Al-Dabbagh fault, however, when they assume such entrepreneurship may be somehow transformed and mapped to the public sector. In pointing out the differences between private and public enterprises, they demonstrate precisely why their idea of “governpreneurship” is bound to fail. Absent the private property rights and resulting profit and loss mechanisms of the market, there is no reason to think that any “entrepreneurial” action in the public sector will yield positive results or result in the creation of value. The authors fail to recognize the distinct, process-based foundations of private sector entrepreneurship. Their “recipe” for government entrepreneurship represents a grave misunderstanding of how entrepreneurs function, the importance of mechanisms to provide feedback, and the incentive to act on that feedback.

Indeed, the authors neglect these points on the nature of competition and entrepreneurship, raised particularly by Kirzner (1973, 1982, 1999), Buchanan (1982), Hayek (1948), and many others. Moreover, they pay no attention to the considerable literature on the nature of bureaucracy and its implication for their analysis. While the authors acknowledge there are problems with implementing a culture of public entrepreneurship as they describe it, they present these challenges as problems which, through top-down planning mechanisms, and trial and error, can be overcome. Literature by Mises (1944), Niskanen (1971, 1975), Migué and Bélanger (1974), and others indicate, however, these issues are inherent in the very structure of government. This implies that the problems raised by the authors are likely insurmountable on a large scale, even if they may point to a few instances of “success.” The authors appear to selecting specific points which make their case rather than analyzing larger patterns. As Mises and others have pointed out, bureaucratic structures – including those discussed by the authors – do not vie for profit within the market context, but instead measure their success by increasing their discretionary budgets and expanding their number of personnel. It follows that cutting costs and undertaking generally more efficient – entrepreneurial – practices are the exact opposite of what occurs within government. The authors fail to consider the possibility that the “innovations” they note are not innovative at all, rather intensive rent-seeking behavior. Simply stated, the incentives faced by individuals within a bureau work strictly against the position advanced by Hisrich and Al-Dabbagh. Their assertion that government entrepreneurs act upon altruistic motives, does not align with this literature or the abundant research on issues of public choice, which suggests public officials, like private ones, are motivated by self-interest and not some ideal of public interest. Those familiar with the aforementioned work on entrepreneurship, the nature of markets, or bureaucracy are bound to question to the robustness of the arguments presented in the book. The examples mentioned throughout, while attempting to make a case for government involvement, in many instances seem to make the case for rolling back government control and allowing private markets to function. Even if one assumes the authors’ cases to be true instances of benevolent bureaucracy and improved government efficiency, they have not made any case to suggest why such instances are likely to be the norm across government agencies. Moreover, they ignore the cache of examples in which government enterprises, as theory predicts and data shows, undertake the exact opposite behavior.

While I appreciate the desire to bring more efficiency to government enterprises, I cannot recommend this book. The message of the authors, while likely very appealing to those with positions in the government and those looking to bolster opinion of the government’s capabilities, fails to provide a critical discussion and ultimately does very little to address existing, crippling criticisms. The volume assumes that current government enterprises are the best “tool for the job” in governing society, even if they could be improved. They fail to recognize the very real possibility that, even if bureaus innovate as they suggest, bureaucracy and government control may still be inefficient compared other alternatives.