Conteh2011-Multilevel Envt Implementation

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Policy implementation in multilevel environments: Economic development in Northern Ontario Charles Conteh Abstract: Recent research on policy implementation has focused on policy interven- tion across multiple jurisdictions with large numbers of actors, loci and layers. The present study seeks to contribute to this endeavour by weaving together theoretical insights drawn from conventional policy implementation, organization theory and governance. The effectiveness of the integrated framework is verified by examining the economic development efforts of the Canadian government in Northern Ontario over the past two decades, focusing on how the federal government’s main economic development agency engages with its provincial and local counterparts, as well as with organized community and private-sector groups within the region. Sommaire : Les recherches re ´ centes sur la mise en œuvre des politiques se concentrent sur l’intervention politique dans les multiples juridictions ou ` interviennent un grand nombre d’acteurs, de lieux et de paliers. La pre ´sente e ´tude cherche a ` contribuer a ` cet effort en combinant les ide ´es tire ´es de la the ´orie sur la mise en œuvre des politiques conventionnelles, de l’organisation et sur la gouvernance. L’efficacite ´ du cadre inte ´gre ´ est ve ´rifie ´e en examinant les efforts de de ´veloppement e ´conomique du gou- vernement canadien dans le nord de l’Ontario au cours des deux dernie `res de ´cennies, en se penchant sur la manie `re dont la principale agence de de ´veloppement e ´conomi- que du gouvernement fe ´de ´ral fait intervenir ses homologues provinciaux et locaux, ainsi que les organismes communautaires et les groupes du secteur prive ´ au sein de la re ´gion. Research on policy implementation has been varied but productive since it be- gan in the early 1970s. Over the past two decades, the search for theories on implementation has focused on the concerted action across institutional boundaries (Lindquist 2006; O’Toole 2000). Analytical perspectives on imple- mentation are taking a broader scope to understand policy intervention across multiple jurisdictions that have large numbers of actors, loci and layers. The author is assistant professor, Department of Political Science, Brock University. He grate- fully acknowledges the comments made by the Journal’s anonymous reviewers. CANADIAN PUBLIC ADMINISTRATION / ADMINISTRATION PUBLIQUE DU CANADA VOLUME 54, NO. 1 (MARCH/MARS 2011), PP. 121–142 r The Institute of Public Administration of Canada/L’Institut d’administration publique du Canada 2011

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Transcript of Conteh2011-Multilevel Envt Implementation

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Policy implementation inmultilevel environments:Economic development inNorthern Ontario

Charles Conteh

Abstract: Recent research on policy implementation has focused on policy interven-tion across multiple jurisdictions with large numbers of actors, loci and layers. Thepresent study seeks to contribute to this endeavour by weaving together theoreticalinsights drawn from conventional policy implementation, organization theory andgovernance. The effectiveness of the integrated framework is verified by examiningthe economic development efforts of the Canadian government in Northern Ontarioover the past two decades, focusing on how the federal government’s main economicdevelopment agency engages with its provincial and local counterparts, as well aswith organized community and private-sector groups within the region.

Sommaire : Les recherches recentes sur la mise en œuvre des politiques se concentrentsur l’intervention politique dans les multiples juridictions ou interviennent un grandnombre d’acteurs, de lieux et de paliers. La presente etude cherche a contribuer a ceteffort en combinant les idees tirees de la theorie sur la mise en œuvre des politiquesconventionnelles, de l’organisation et sur la gouvernance. L’efficacite du cadreintegre est verifiee en examinant les efforts de developpement economique du gou-vernement canadien dans le nord de l’Ontario au cours des deux dernieres decennies,en se penchant sur la maniere dont la principale agence de developpement economi-que du gouvernement federal fait intervenir ses homologues provinciaux et locaux,ainsi que les organismes communautaires et les groupes du secteur prive au sein dela region.

Research on policy implementation has been varied but productive since it be-gan in the early 1970s. Over the past two decades, the search for theories onimplementation has focused on the concerted action across institutionalboundaries (Lindquist 2006; O’Toole 2000). Analytical perspectives on imple-mentation are taking a broader scope to understand policy intervention acrossmultiple jurisdictions that have large numbers of actors, loci and layers.

The author is assistant professor, Department of Political Science, Brock University. He grate-fully acknowledges the comments made by the Journal’s anonymous reviewers.

CANADIAN PUBLIC ADMINISTRATION / ADMINISTRATION P UBLIQUE DU CA NADA

V OLUM E 54 , NO. 1 (MARCH /MARS 20 11) , PP. 1 21– 14 2

r The Institute of Public Administration of Canada/L’Institut d’administration publique du Canada 2011

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This study seeks to integrate existing research on policy implementationwith insights drawn from theory on organization and governance. The aim isnot to delegitimize existing frameworks for understanding policy imple-mentation but, rather, to enrich the discussion by drawing from otheranalytical traditions that seek to understand policy processes in diverse,complex and dynamic policy environments. Such an integrated analyticalframework could combine the strengths of various perspectives on con-certed policy action that involve multiple players across institutionalboundaries within and outside the public sector. Moreover, an integratedanalytical framework is consistent with the original mission of researchon policy implementation to identify the connection – the ‘‘missing link’’ –between politics and administration (Hjern 1982).

By looking at the implementation of regional economic development pol-icy in Northern Ontario, this article will demonstrate the utility of theintegrated framework. The problem of economic development is a genericchallenge worldwide, even as resource-rich regions in developed and devel-oping countries struggle to reach a sustainable level of economic growth.Canada has a long tradition of seeking to alleviate the socio-economic dis-advantages of less developed regions (including Northern Ontario) byintervening in economic development policy.

Provincial governments and municipalities, however, have been similarlyengaged. This article examines the federal government’s efforts at economicdevelopment for Northern Ontario and focuses on how its main economicdevelopment agency, FedNor, engages with its provincial and local counter-parts, as well as with organized community and private-sector groups,within the region.

Towards a multi-actor implementationframework

For the purpose of the present research, I will use the term ‘‘multi-actor imple-mentation framework’’ to refer to the integrated framework that combinesinsights from theory on policy implementation, organization, and governance.Such a framework is concerned with understanding the nature of interactionand exchange among organized policy stakeholders in the public sector,as well as those between public agencies and non-governmental organizationsand the private sector. The goal is to combine the analytical strengths of thesethree distinct but parallel analytical perspectives in order to understandbetter the policy implementation processes in complex, diverse and dynamicsocieties.

The next three subsections of this article will briefly introduce how theo-retical perspectives on policy implementation, organization and governancehave each addressed the implementation of policy in the context of multiple

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partners. The fourth subsection will integrate these perspectives into a singleframework. The article will then illustrate the benefits of this integratedframework through an examination of the federal government’s interven-tion – that is, its mandating specific agencies to allocate resources to achievea particular set of policy goals – in economic development policy in North-ern Ontario.

Theoretical perspectives on policyimplementation

The term ‘‘implementation’’ as a popular concept in contemporary discourseamong scholars of public policy dates back to the work of Jeffrey Pressmanand Aaron Wildavsky (1973) in the early 1970s. Research on policy imple-mentation provides the essential link between political and economicanalyses of policy implementation and the organizational/institutionalanalysis of public administration (Hjern and Hull 1987). This research hasbeen through some major phases of development. Three phases – commonlyreferred to as the first, second and third generations – can be identified in theliterature (Goggin 1990; Howlett and Ramesh 1995; Pal 2006). Elaborating onthese approaches is beyond the scope of the present work, but a brief over-view, however, will serve as a context for advancing our understanding ofthe multi-actor implementation framework proposed here.

When it was originally developed as a field of inquiry, research on policyimplementation was marked by the emergence of a top-down approach inthe scholarly literature (Bardach 1977; Pressman and Wildavsky 1973; Saba-tier and Mazmanian 1981). The theoretical and empirical assumptions of thisapproach were immediately criticized as excessively mechanistic and unableto do justice to the realities of policy delivery in democratic societies. Thecritics who espoused a bottom-up approach were unified by their effort toexamine the politics and processes of policy implementation, starting fromthe frontlines of public administration, where street-level public officials of-ten interact with organized societal interests (Barrett and Fudge 1981; Elmore1981; Kickert 1997; Klijn 1996). The debates on the relative merits of the top-down and bottom-up approaches were grouped under the label of ‘‘first-generation implementation research’’ (Hill and Hupe 2002).

A consequence of the normative schism between the two traditions wasthe theoretical impoverishment of first-generation research on policy imple-mentation. A new generation of scholars emerged in the late 1970s and early1980s – a second generation of research – who synthesized the insights of thetop-down and bottom-up approaches into a conceptual framework that con-sisted of a set of theories of implementation (O’Toole 1986; Palumbo andCalista 1990; Sabatier 1986). This synthesis approach, however, has its ownproblems – especially its tendency to be little more than a combination of

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variables from the two perspectives, which leaves the reader with a long listof variables and complex diagrams of causal chains (Exworthy and Powell2004; Linder and Peters 1987; Sinclair 2001).

A third generation of researchers, who distilled the large number of vari-ables into a manageable framework, eventually emerged in the late 1980sand early 1990s (Winter 1990). They hoped to develop more elegant theoriesthat could lend themselves to broader generalizations and more longitudinalinquiries (Goggin 1990). As Laurence O’Toole Jr. (2000) notes, however, thiseffort proved too ambitious, because very few scholars have so far been will-ing to undertake such inquiries. In the 1980s, moreover, the process of policyimplementation was influenced by structural changes in public administra-tion towards decentralization, devolution of responsibilities, partnerships,and the restructuring of accountability relationships in service delivery(Kettl 2000; O’Toole 2000; Pal 2006). As a result of such transformations,public policies are increasingly being implemented in concert with non-stateactors in cooperative or collaborative partnership arrangements. These newinter-organizational partnerships are not merely a passing fancy but arelikely to be permanent features on the landscape of policy implementation(Kernaghan, Borins, and Marson 2000).

The central concern shared by theoretical perspectives onpolicy implementation, organization and governance isto understand how government organizations interactwith their external environment in the delivery of policies

As a result of transitions towards complex and multi-actor policy pro-cesses, the focus of research on implementation shifted from trying to buildmeta-theory towards explaining concerted action across institutional bound-aries (Lindquist 2006; O’Toole 2000). Thus, one notices the broadening of theapproach to research on policy implementation into a multi-focus perspec-tive that looks at a multiplicity of actors, loci and levels (Hill and Hupe 2003).In federal systems, for instance, the different levels of policy action consist offederal, provincial or state and municipal jurisdictions and their agencies.The loci of policy action often consist of constellations of ideational and in-terest coalitions within and outside the state within a policy subsystem(Sabatier and Jenkins-Smith 1993).

Organization theoryCertain elements of organization theory illuminate the complexity of imple-mentation processes within policy subsystems by situating organizations asthe principal players in the policy process. Policy implementation can thusbe understood as a process that involves a series of interactions among

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public agencies, on the one hand, and between public agencies and orga-nized target-groups within the community and the private sector, on theother (Schofield 2004; Sinclair 2001).

Organization theory’s long tradition of examining the interactions be-tween organizations and their external environment has given rise to two(competing) analytical approaches to understanding complex organizations:the closed-systems and open-systems approaches (Denhardt and Denhardt2003; Thompson 1967). Analysts of open systems focus on understanding therelationship between public organizations and their strategic (or external)environment (Denhardt 2004; Tompkins 2005; Wamsley and Zald 1973). AsJ.E. Jreisat (2002) succinctly put it, the open-systems approach broke funda-mentally from the machine models (closed systems) view of policyimplementation and focused instead on complex relations in the organiza-tion and the broader political context within which they operate. Indeed, theassumptions of order and control that preoccupied early organization theoryled to analyses of power and conflict in organization behaviour becomingthe very essence of policy implementation. Organization theory has thusbeen grappling with the need to re-examine policy intervention by publicagencies as a highly complex process in which public agencies engage otherorganizations (including community and private-sector organizations), of-ten as partners rather than subordinates.

Donald Kettl (2000) provides a compelling summation of these trends inhis observation that organization theory, in particular, and public adminis-tration, in general, are revisiting and adjusting the discipline’s analyticalapproach to allow for the view that agencies are adaptive organisms that re-spond to political and technical change in their environment in order tosurvive and be effective. Thus, in attempting to further understand servicedelivery or policy implementation in complex and dynamic systems, schol-ars of organization theory are increasingly required to describe and analysethe relationship between public agencies and their political environments inorder to generate a complete picture of the implementation process.

Theoretical perspectives on governanceThe present study conceptualizes policy implementation as institutionalizedpolicy subsystems centred on a number of organizations with diversesources. Therefore, an equally important element in the analysis of the the-oretical perspectives on governance is the nature of horizontal engagementbetween public agencies and non-state organizations. Insights from gover-nance theory, for instance, have accounted for the actions of organized targetgroups and other societal interests in less hierarchical policy-settings(Agranoff and McGuire 1998; Kooiman 2000; Peters and Pierre 2000; Rhodes2000).

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Although the concept of governance has escaped a clear definition, inthe context of advanced democracies, it generally refers to a wide varietyof self-sustaining networks through which the state engages in sharingpower and administrative responsibility with non-state policy actors.The concept has also been widely used in the development literature toaddress issues of state capacity and legitimacy in developing countries(Conteh 2009; Conteh and Ohemeng 2009; World Bank 2009), but this usageis beyond the scope of the present discussion. Theoretical perspectives ongovernance are broad-ranging, from those that identify a dominantpublic sector constrained by a constellation of organized societal actorswithin a relatively complicated policy subsystem (Peters 2001) to those thatperceive highly complex systems in which adaptive abilities are required ofall members within a network (including public agencies). This adaptiveprocess has been described as ‘‘co-evolution’’ (Teisman, Buuren, and Gerrits2009).

Thus, through the lens of an integrated framework, one canmake two interrelated propositions; first, that the politicallegitimacy and coordinating capacity of public agencies areindispensable elements of policy implementation;second, that policy implementation can be seen as a complexmix of hierarchy and collaboration

Some of the major theoretical perspectives on governance include net-work governance (Keast et al. 2004), governance networks (Kooiman 2006;Pierre and Peters 2005), and collaborative management (Agranoff andMcGuire 2003). These broad analytical frameworks overlap in many waysand have been further grouped under themes such as multilevel governance(Hill and Hupe 2002), transition management (Kooiman 2006; Loorbach2007), and complex adaptive systems (Teisman and Klijn 2008; Teisman,Buuren, and Gerrits 2009).

Governance theory views policy processes as characterized by variationsof state–society relations, with the latter in turn consisting of societal groupsmobilized by principles of self-governance in various forms of joint actionwith public organizations. Some scholars of governance refer to this as third-sector engagement in co-production (Agranoff and McGuire 2003; Kooiman2000; Peters and Pierre 2000; Rhodes 2000). Governance theory, therefore,could be seen as reflective of a keen awareness of the realities of politics as anintrinsic element of public administration. It seeks to identify the nature ofthe interaction between public organizations (as necessary agents of policyimplementation) and other organized entities outside the state, often focus-ing on the frontlines of service delivery.

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Combining the theoretical perspectives

The central concern shared by theoretical perspectives on policy implemen-tation, organization and governance is to understand how governmentorganizations interact with their external environment in the delivery of pol-icies. A common thread flowing from this shared concern is the need toreconceptualize power and authority among public and non-state organiza-tions in the policy environment (Rothstein 2003).

In attempting to integrate the insights from these three theoretical per-spectives, it is important to identify their distinct elements. Research onpolicy implementation has long sought to synthesize top-down and bottom-up approaches, which has led to an accumulation of insights into the rela-tionships between various levels of government. One constant challenge is tounderstand the tensions between frontline agencies and their head offices. Infederal systems such as Canada’s, for instance, these tensions take on a par-ticularly poignant character in the form of inter-governmental jurisdictionalrivalries and frustrated efforts at joint action (Simeon 2006).

Organization theory adds to this by suggesting that the success ofpolicy implementation is a function not merely of the government’s intra-organizational integrity, expertise and coherence but also of its adaptationto the imperatives of its external environment. This perspective calls ourattention to the willingness or ability of organizations to reorganize theirculture, operations and even their structural features in ways that may in-volve sharing authority and power, as well developing a learning culture.How public agencies seek to adjust their mission to reflect the changing val-ues and interests of the local environment thus becomes an importantconsideration in understanding policy implementation.

Governance theory, for its part, calls our attention to the emergent phe-nomenon of third-sector engagement in co-production. The institutional andideational forces underlying the shift in policy implementation can be un-derstood as causing a transition from simply delivering and directing to oneof facilitation, coordination and empowerment. The expectations and de-mands of organized actors outside the public sector imply that the externalenvironment is not just a set of variables to be manipulated by public agen-cies. Building legitimacy for effective policy intervention requires publicagencies to identify the main actors within the field and their specific de-mands and then to seek ways to coordinate the various bases of power. Thestructure of support and established feedback loops that public agenciesmaintain with local organized actors are, therefore, crucial factors of imple-mentation success in this regard.

Thus, through the lens of an integrated framework, one can make two inter-related propositions; first, that the political legitimacy and coordinating capacityof public agencies are indispensable elements of policy implementation;

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second, that policy implementation can be seen as a complex mix of hierar-chy and collaboration. Inter-organizational interactions in this context areboth cooperative and conflictual, as public agencies navigate through vari-ous levels of constitutional and policy jurisdictions while at the same timestriving to gain legitimacy and positive feedback from non-state policystakeholders. Structured hierarchies are confronted with the need to adjusttheir processes to environmental imperatives of horizontal management inorder to maintain system stability, manage change, and deepen the impact oftheir policy intervention.

In conclusion, the multi-actor implementation framework views policyimplementation as diverse expressions of inter-organizational cooperationamong public agencies, on the one hand, and between state agencies andorganized societal interests, on the other. These inter-organizational cooper-ative efforts are seen as strategic networks of complex relationshipsinvolving inter-governmental cooperation among agencies with similarmandates from different levels of government, and state–society partner-ships incorporating community development organizations and businessgroups. The case study in the next section seeks to verify the effectiveness ofthe multi-actor implementation framework.

Federal economic development policy inNorthern Ontario

This section examines the federal government’s economic development pol-icy intervention in Northern Ontario over the past two decades. The goal isto illustrate the benefits of the proposed ‘‘multi-actor implementation frame-work.’’ Data was collected through content analysis of regional developmentpolicy and program documents and through a series of semi-structured in-terviews with officials of organizations within and outside the Canadian andOntario governments that are involved in regional economic development inNorthern Ontario. Interviews were conducted with senior and mid-levelofficials at the Federal Economic Development Initiative for Northern On-tario (FedNor), which is the main federal organization responsible fordelivering economic development programs to transform the region’s de-pendence on a primary-resource economy.

Interviews were also held with officials at the Ontario Ministry of North-ern Development, Mines and Forestry – the main ministry responsible forthe provincial government’s economic diversification initiatives in the re-gion. Other interviews were held with the representatives of theNorthwestern Ontario Municipal Association, the Northeastern OntarioChambers of Commerce, and the Northwestern Ontario Associated Cham-bers of Commerce. Finally, other interviewees included several agencies andactors at the municipal level, in the private sector, and in non-governmental

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organizations, including the Nishnawbe-Aski Nation, a representative bodyof aboriginal peoples in the region.

Before dwelling on the dynamics of the federal government’s economicdevelopment policy intervention in Northern Ontario, however, a brief back-ground sketch of this policy is in order. Against the backdrop of a historicaland national context of regional economic development policy in Canada,we can then examine its manifestation in Northern Ontario.

BackgroundThe economic history of Canada as a staples system means that the Canadianstate has shown a tendency to maintain strong elements of interventionismin its approach to national development (Nelles 2005). In social policy, suchinterventionism crystallized into a gradual transition to collectivism, with itsmost recent manifestation over the past five decades as a developed welfarestate (Brooks and Miljan 2003). In economic development policy, a key ex-ample of active policy intervention in society has been the government’seffort to correct structural imbalances in industrial diversity and growthamong the regions (Careless 1977). From its humble beginnings in the cre-ation of a number of uncoordinated boards and agencies in the early 1960s,regional development policy has become an enduring feature of public pol-icy and governance in Canada.

Regional economic development policy can be traced back to the RoyalCommission on Canada’s Economic Prospects (the Gordon Commission) of1955–57, which urged Ottawa to focus on a developmental approach for cor-recting regional disparities, noting the need to develop regional economiesrather than merely compensating provinces for rates of economic growthlower than those achieved by the country as a whole (Canada, Royal Com-mission on Canada’s Economic Prospects 1957). The Gordon Commission’srecommendations reflect the country’s desire (at least in economically dis-advantaged regions) for a more deliberate focus on regional developmentissues aimed at a systematic easing of ‘‘disparities.’’ The commission main-tained that the socio-economic realities of Canada’s geographically remoteand structurally fragile regions, such as much of Atlantic Canada,for instance, justify and, indeed, necessitate the ‘‘visible hand’’ of the stateas a key agent of resource mobilization and allocation in pursuing economicdevelopment.

Several stages mark the evolution of regional economic development pol-icy in Canada since the 1960s (Aucoin and Bakvis 1984; McGee 1992). TheDepartment of Regional Economic Expansion, created in 1969, was the pre-cursor to the present institutional configuration of regional economicdevelopment policy in Canada. A major restructuring in 1987 led to the cre-ation of three regional development agencies: Western EconomicDiversification Canada; the Atlantic Canada Opportunities Agency; and the

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Federal Economic Development Initiative for Northern Ontario (FedNor)(Beaumier 1997; Canada, Office of the Auditor General 1995). (NorthernQuebec eventually acquired its own development agency in 1991.) Whileother federal regional development entities are separate departments, Fed-Nor was subsumed under Industry Canada. The creation of these newagencies was part of a trend towards larger regions for developmental pro-gramming in Canada. In Northern Ontario, as in the other regions, theemphasis was on strengthening large-scale regional economies and promot-ing industrial diversification.

FedNor in Northern OntarioNorthern Ontario is a region with a vast land mass and small population.Although it covers approximately 800,000 square kilometres, representingalmost ninety per cent of the Ontario land mass, the region only has a totalpopulation of approximately 786,500 – about six per cent of that of the prov-ince. Its economy is dominated by five large population centres: Sudbury,Thunder Bay, Sault Ste. Marie, North Bay and Timmins. The history andstructure of industry in the region confirms a trend of persistent decline inthe mainstays of the economy (mostly primary resource industries), with agradual shift towards service industries but a general decline in industrialactivity and a traditional weakness in secondary manufacturing and serviceindustries (the presence of pulp and paper mills notwithstanding) (Bollman,Beshiri, and Mitura 2006). The share of employment in primary and manu-facturing industries declined, from twenty-eight per cent in 1981 to sixteenper cent in 2001 (Southcott 2006). The picture of industrial stagnation – andeven of decline – is reflected in socio-economic indicators like a high unem-ployment rate, low average income, and net outmigration relative to the restof the province.

Before 1987, the federal government’s economic development initiativesfor Northern Ontario were indirect, with funds for rural and northern de-velopment in the region channelled through the provincial government(Ontario, Ministry of Treasury, Economics and Inter-governmental Affairs1973). With the 1987 restructuring (and the creation of FedNor), the federalgovernment decided to deliver its own economic development programs di-rectly. The agency’s mandate, broadly speaking, is to promote economicgrowth, diversification, and job creation in Northern Ontario (Canada, Officeof the Auditor General 1995; Goldenberg 2008).

FedNor has two main programs, the Northern Ontario DevelopmentProgram and the Community Futures Program. The first program promoteseconomic development and diversification by providing repayable andnon-repayable contributions to non-profit organizations and small andmedium-sized enterprises. It is an all-embracing program, covering almostevery sector. The Community Futures Program supports the twenty-four

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Community Futures Development Corporations – part of a larger nationalprogram supporting community economic development and small-businessgrowth in disadvantaged regions – located in Northern Ontario. FedNor’stwo programs have thus been designed to address some of the challenges instructural, sectoral and community economic development facing the regionby improving access to capital for small business and supporting commu-nity economic development endeavours, as well as providing businessinformation and market intelligence for the private sector.

Whereas other regional development agencies, like the Atlantic CanadaOpportunities Agency and Western Economic Diversification Canada, enjoyconsiderable departmental autonomy, a distinct feature that initially shapedFedNor’s implementation of economic development policy was that it waslargely subsumed under the direct purview of Industry Canada (Canada,Office of the Auditor General 1995). This structural characteristic meantthat although the agency was, in principle, mandated to work with theprivate sector, community partners and other organizations, it lackedpolicy discretion to sustain credible partnerships at the frontlines (personalcommunication with senior official, FedNor, Thunder Bay, 2009). FedNor’smandate was, however, consistent with the normative preferences of the top-down approach to policy implementation in prevalent scholarly literature.Since FedNor’s programs were based on policies developed within IndustryCanada, the agency’s ability to adapt to the imperatives of its external envi-ronment was constrained. This constraint did not mean, however, thatFedNor officials were opposed to working with local partners. In fact, inthe early to mid-1990s, FedNor officials made efforts to work with commu-nity groups in program delivery (Canada, Office of the Auditor General1995). The problem was that the agency’s model of governance was gener-ally perceived to be too hierarchical (personal communication with councilmember, Northwestern Ontario Municipal Association, 2009).

FedNor’s efforts to create an environment of consultation and partnershipinvolving communities, businesses and other levels of government werehindered by the fact that the agency was principally a program-delivery or-ganization without authority to develop its own policies or to deviate fromthose set within the framework of Industry Canada. Thus, although a prin-cipal feature of the new policy and organizational configuration of 1987 wasa decentralization of administrative and policy functions away from Ottawaand towards the regions, this was not the case for FedNor in Northern On-tario. If the new approach after 1987 was to allow for more direct interactionbetween local federal agencies and the community in the design and imple-mentation of programs, FedNor was given no authority to engage in it.

The operational framework of FedNor’s mandate at birth was what thefirst-generation critiques of top-down models of policy implementationwould have described as excessively mechanistic and unable to do justice

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to the realities of policy delivery in democratic societies or complex multi-level jurisdictions. Also, analysts of the open systems described inorganization theory would have referred to FedNor’s mandate fundamen-tally as one using a machine model or a closed systems view of policyimplementation that de-emphasizes the complex relations in the broaderpolitical context within which agencies operate.

In the early 1990s, disaffection with FedNor’s implementation model be-gan to surface from isolated quarters in Northern Ontario. Since the late1960s, successive governments in the province have been involved in pro-moting economic diversification in the region. Before 1987, most federalresources for economic development in Ontario’s socio-economically disad-vantaged regions were channelled through the Ministry of NorthernDevelopment and Mines (the ministry’s name changed several times overthe past five decades and, since 2009, now includes Forestry). This meantthat the ministry enjoyed a rather hegemonic and unrivalled status in theprovince’s economic development and program delivery. Thus, the ministryviewed FedNor’s mandate and operational model with some curiosity. Andinasmuch as FedNor wanted its mission to be consistent with the core valuesand interests of the local environment, the agency took note of the ministry’sjurisdictional sensitivities (personal communication with FedNor official,Sudbury, 2009).

This development can be understood through the lens of the emergentfocus of research on policy implementation across institutional boundaries.According to this approach, the implementation of FedNor’s programs inNorthern Ontario would have to be contextualized within Canada’s fed-eral system, with its different levels of policy action at the federal, provincialand even municipal jurisdictions. In this regard, the challenges of inter-governmental coordination can be seen in FedNor’s relationship with theNorthern Ontario Heritage Fund Corporation, the agency that delivers theministry’s programs (personal communication with middle-level ministryofficial, Thunder Bay, 2009). The corporation performs functions similar tothose of FedNor, like providing financial assistance and advice to business,primarily through industrial and regional development programs designedto fill gaps in capital markets. It also supports industries in manufacturingand related activities, tourism operations, and exporters. It finances projectsand firms that are commercially viable but that, because of high risk, wouldnot be financed by private financial institutions.

FedNor thus had to work around its structural constraint in order to incor-porate more inter-governmental coordination with the Ministry of NorthernDevelopment and Mines. For the ministry, however, inter-governmentalcoordination meant that FedNor had to incorporate considerable elementsof the ministry’s policy vision into its own development programs. Thiswould mean that policy direction for FedNor could not simply come from

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outside the region (personal communication with ministry official, ThunderBay, 2009). A better way to understand this apparent complexity is the in-sight provided by analysts of open systems. Their focus is on the relationshipbetween a particular public agency and its strategic (or external) environ-ment. In their rejection of the machine models (closed systems) view ofpolicy implementation, analysts of open systems emphasize the complex re-lations between public agencies and the broader political context withinwhich they operate. The assumptions of order and control that may preoc-cupy Industry Canada’s relationship with FedNor, for instance, are viewedas simplistic and thus threaten FedNor’s potential failure. A way out of theimpasse was for FedNor to be given the authority to re-examine its policyintervention in Northern Ontario in terms of a highly complex process inwhich the agency must engage other organizations such as the ministry andits affiliate agency, the Northern Ontario Heritage Fund Corporation.

The complexity created by the inclusion of municipalities(in addition to the province) into FedNor’s policy space isthe ideal image of what implementation research refers toas the challenges of concerted action across institutionalboundaries

Clearly, within such a context, FedNor’s adaptive abilities were extremelyimportant to the agency’s success at navigating through inter-governmentaltensions. The challenge presented to FedNor is to balance the imperatives ofits relationship with Industry Canada while at the same time addressing ju-risdictional sensitivities at the frontlines of its operations. What makes thechallenges of inter-governmental coordination even more significant for pol-icy intervention, from FedNor’s standpoint, is the fact that Canadianfederalism makes the provinces the primary players in regional economicdevelopment (Simeon 2006). Major areas where the provinces have flexibil-ity in developing policy include the determination of which resources will bedeveloped, how, to what extent and by whom, and the extent of local publicinput into policies and plans and of participation in implementation. A longhistory of province-building in Canada has led to the development of strong,wilful provincial states bent on pursuing provincially defined economicstrategies that sometimes seek to compete with or displace the federal gov-ernment wherever and whenever possible (Simeon 2006).

Other challenges to FedNor’s model of program delivery emerged frommunicipalities. Around the late 1990s, ideational shifts in the conceptualiza-tion of economic development focused on community economic development(Goldenberg 2008). Paradoxically, local regions seemed ever more eager tomanage their own economic destinies in the face of globalization. In Northern

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Ontario, major municipalities such as Sudbury, Thunder Bay, Sault Ste. Ma-rie and Timmins began to take more assertive stances in demanding that theprovincial government rethink its engagement with local entities. Munici-palities no longer wished to be treated simply as ‘‘clients’’ of economicdevelopment programs. They viewed themselves as better equipped interms of organization, knowledge and technology to serve as conduits ofeconomic development in the region (Northwestern Ontario Municipal As-sociation 2007). Municipalities perceive themselves to be closest to theproblems of local economic development and therefore believe they shouldbe viable partners, with insights considered germane to policy developmentand program design and delivery. Consequently, municipalities increasinglyexpect to be part of any policy and governance structure aimed at addressingthe ills of their regional economy (personal communication with councillor-at-large, Thunder Bay).

In essence, FedNor was confronted with yet another wave of demands forthe agency to work more closely with other levels of government. The com-plexity created by the inclusion of municipalities (in addition to theprovince) into FedNor’s policy space is the ideal image of what implemen-tation research refers to as the challenges of concerted action acrossinstitutional boundaries. The three orders of government, each with theircompeting jurisdiction, constitute the multiplicity of actors, loci and levelsthat Michael Hill and Peter Hupe (2003) describe. Although municipalities inCanada are technically creatures of the provinces, FedNor’s concern aboutits political legitimacy in the region meant that the agency could not simplyignore the risks of failing to respond to municipalities’ demands for closerpartnership. FedNor was faced with the challenge of reconciling IndustryCanada’s national frame of reference in policy development with the partic-ularistic nature of municipalities’ approach to local economic development.

An example of this challenge is FedNor’s close engagement with the Cityof Greater Sudbury in a project to assess under-serviced industrial land todetermine the viability of future development. In the past, part of FedNor’sapproach was to consult with Industry Canada officials to prevent local pro-jects conflicting with departmental policies. Rather than settingpreconditions or dictating the terms of the project, the framework of imple-mentation was designed to enable municipal authorities to make projectionsand plans about the industrial future of their city. It was not a completelybottom-up framework either, because, as a partner, FedNor could influencethe direction of industrial assessment and planning in the city.

Furthermore, other developments were emerging outside the institutionalboundaries of the public sector. In particular, aboriginal communities, rep-resented through their treaty organizations within Northern Ontario, havebeen increasingly demanding a role as distinct jurisdictional entities in theplanning of the region’s economic development (see the Nishnawbe Aski

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Nation’s web site at http://www.nan.on.ca). Significant numbers of aborig-inal people are relocating to the urban centres of Sudbury, Thunder Bay,Sault Ste. Marie, Timmins, Kenora, and Sioux Lookout as they seek furthereducation and employment opportunities. Their participation is thusdeemed crucial to any forward-thinking approach to the economy of the re-gion (Abele 2006). A recent report (Rosehart 2008) sponsored by the Ontariogovernment concludes that there is a strong recognition within the regionthat all future development initiatives by higher levels of government, mu-nicipalities, businesses, industries and other stakeholders must be carriedout in concert with the First Nations. The expectations and demands of ab-original groups are rooted deeply enough into the fabric of Canadian politicsfor FedNor not to view them as just a set of variables to be manipulated.Building legitimacy for effective policy intervention in a region withFirst Nations communities requires a careful identification of their existingcommunity-governing structures and then coordinating with the variousbases of power.

The private sector also added to the complexity of FedNor’s policy envi-ronment by maintaining that businesses have increasingly been thinking interms of the ‘‘market of regions’’ in their investment calculations. Like mu-nicipalities, the private sector, through an umbrella chamber of commerce(see, for example, the Northwestern Ontario Associated Chambers of Com-merce’s web site at http://www.noacc.ca),1 viewed its participation in thegovernance infrastructure of the region as crucial to its prosperity. For in-stance, the Northwestern Ontario Associated Chambers of Commercemaintains that domestic and international market pressures require a frame-work of regional development that goes beyond disparate project-funding.Establishing more permanent feedback loops between public agencies andthe private sector, the argument goes, would be more conducive to inter-sectoral and longer-term economic planning for the region.

One way to understand the implications of non-state actors in FedNor’sengagement with Northern Ontario is to draw from the theoretical insightson governance discussed earlier. According to this literature, FedNor’s ac-tivities can be seen as contextualized within an intricate web of state–societyrelations, with the latter in turn consisting of groups within societymobilized by a desire for self-governance. FedNor is faced with an insti-tutionalized policy subsystem characterized by a number of organizationswithin and outside the public sector. The dialectics of horizontal engagementas conceptualized by scholars of governance would suggest that policyimplementation must take into consideration the perspectives and actionsof organized target groups and other societal interests in less hierarchicalpolicy settings. Some governance scholars may view FedNor’s policy inter-vention in Northern Ontario as one in which a dominant public agency isconstrained by a constellation of organized societal actors within a relatively

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complicated policy subsystem. Others may view the whole region as ahighly complex system in which the adaptive ability of FedNor will becrucial to its successful interaction with the emerging organized interestsin the region.

In the wake of the changes to its policy landscape, FedNor recognizedthe need to revisit its regional development policy framework. Part of theadaptation by the agency was a de facto restructuring, at the turn of the mil-lennium, of its intra-organizational processes for greater autonomy fromIndustry Canada to formulate and adapt its policies. It was a significantdevelopment for a more credible pursuit of community partnerships andclose consultation with other agencies (see FedNor’s web site at http://www.ic.gc.ca/eic/site/fednor-fednor.nsf/eng/Home). FedNor’s adapta-tion to the exigencies of the local environment cannot, however, be seen as acomplete break from the policy influence or even of control by IndustryCanada. Rather, as proposed earlier, the agency’s recent emphasis on multi-actor negotiations and inter-organizational implementation models can beseen as a complex mix of hierarchy and collaboration.

The combined theoretical perspectives of policy implementation, organi-zation and governance reinforce our understanding of policy implemen-tation in modern political systems as both cooperative and conflictual, aspublic agencies navigate through various levels of constitutional and policyjurisdictions. Meanwhile, these agencies strive to gain legitimacy and posi-tive feedback from non-state policy stakeholders. FedNor’s beginningswithin the context of a structured hierarchy were confronted with the needto adjust to environmental imperatives of horizontal management in order tomaintain system stability, manage change, and deepen the impact of policyintervention. In this light, the proposed multi-actor implementation frame-work views FedNor’s latest strategy of policy implementation as consistingof inter-organizational cooperation between FedNor and other public agen-cies, on the one hand, and between the agency and organized societalinterests, on the other.

In 2009, for example, the Government of Canada committed $9.5 millionthrough FedNor’s Northern Ontario Development and Community Futuresprograms to support economic development throughout Northern Ontario.Although the money was accompanied by broad policy directions for use ineconomic development, the rather vague terms of the directives allowed forconsiderable local flexibility. FedNor’s framework of implementation in-cluded a distinct emphasis on working with aboriginal and othercommunity groups, as well as with the private sector, to ‘‘develop a respon-sive, business-ready infrastructure’’ for the region (personal communicationwith a representative of the Nishnawbe Aski Nations). Given the complex,inter-sectoral, and highly local nature of regional economic develop-ment, FedNor had to adjust its limited policy discretion to achieve wider

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environmental imperatives while, at the same time, remaining conscious ofexisting accountability structures within Industry Canada. These ongoingtensions meant that FedNor’s culture became that of a ‘‘learning organiza-tion’’ (personal communication with FedNor official, Sudbury, 2009). As alearning organization, FedNor could hope to exploit emerging feedbackloops with the local constellation of organized actors in the region, therebydeepening its policy intervention.

FedNor’s recent approach to policy implementation vali-dates the proposition under discussion that the politicallegitimacy and coordinating capacity of public agenciesare indispensable elements of policy implementation

For FedNor, the gains from operational flexibility and adaptation havebeen more than symbolic. For instance, the agency seems better positioned todeal with yet another major development that started in the middle of thisdecade. In 2005, the Ontario government adopted a broader and more am-bitious vision of regional economic diversification for Northern Ontario.Under the leadership of the ministries of Energy and Infrastructure and ofNorthern Development, Mines and Forestry, the Proposed Growth Plan forNorthern Ontario was set in motion by the provincial Places to Grow Act,2005 (S.O. 2005, c. 13). The strategy calls for comprehensive planning acrossall the sectors in the region, with a long-term projection of about twenty-fiveyears. An administrative framework supporting the Growth Plan has alsobeen established, consisting of an inter-ministerial forum known as the ‘‘G-North Ministers Table.’’ This special committee of sixteen provincial cabinetministers, with mandates related directly to issues of economic developmentin Northern Ontario, coordinates the Ontario government’s approach to pol-icy, planning and direction-setting in the region.

The Ontario government’s policy assertiveness in the region has been un-folding rapidly, gaining great momentum and much publicity. Widespreadpublic consultation and promotion exercises were held around the regionfrom 2007 to 2009. Whether FedNor views these developments as a threatis unclear. What is clear is that FedNor officials have participated in con-sultation and planning conferences, together with representatives from mu-nicipalities, the private sector and other stakeholders in the region. Such apublic show of support for ministerial leadership may seem at odds with apublic agency’s jurisdictional impulse and ambitions, but forming a unitedfront with other public agencies is a strategic investment in building legiti-macy within its external environments. FedNor cannot be seen to beopposed to these developments. Moreover, although it is a small agencycompared to Ontario’s Ministry of Northern Development, Mines and

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Forestry, the federal agency’s participation in the new governance frame-work increases its chances of carving a policy space within the rapidlychanging bases of power in the region. FedNor can maintain some institu-tional capital to influence the terms of regional development policy andprogram coordination in the new environment.

The new framework also seems consistent with FedNor’s program interest.It allows public agencies across the levels of government to overcome programfragmentation and duplication that results from inter-governmental rivalry.Criticisms about duplication, fragmentation and waste in the past have oftenhurt the image of all public agencies (Canada, Office of the Auditor General1995). For instance, FedNor now promotes its programs as part of a broaderstrategic investment in the region, complementing efforts of the Growth Planand other initiatives to help communities make the transition to a diversifiedeconomy.

FedNor’s recent approach to policy implementation validates the propo-sition under discussion that the political legitimacy and coordinatingcapacity of public agencies are indispensable elements of policy implemen-tation The open systems perspective of organization theory suggests that thesuccess of policy implementation is a function not merely of public agencies’intra-organizational integrity, expertise and coherence but also of their ad-aptation to the imperatives of the environment within which they operate.Theoretical perspectives on governance draw our attention to the phenom-enon of increasing societal mobilization and engagement in policyformulation and implementation. These two perspectives thus enrich dis-cussions about policy implementation by seeking to explain the institutionaland ideational forces that underlie the shift in policy implementation. Theintegrated insights of these theoretical traditions confirm that policy imple-mentation is shifting from simply processes of delivery and directing toprocesses that involve facilitation, coordination and empowerment. In culti-vating legitimacy for successful policy intervention, public agencies mustidentify the main actors within their field of operation and then seek ways tocoordinate the various bases of power within that policy subsystem.

The political context of economic development in Northern Ontario hasobviously changed considerably over the past two decades. FedNor hascome a long way in its attempts to adapt its model of policy implementationto the changes in its external environment. It now emphasizes economic de-velopment through partnerships among levels of government, First Nations,non-governmental organizations and the private sector. The ongoing effortunder the Proposed Growth Plan for Northern Ontario to move towards amore collaborative governance framework can be seen as the culmination ofa long undercurrent of change in the region, and these changes are still un-folding. The agency’s willingness and ability to adapt to these emergenttransformations will, it seems, continue to be tested. If past trends are any

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indication, FedNor may have reason to believe that it can survive the com-plexities of change and remain an effective player in the economic future ofNorthern Ontario.

ConclusionThis case study has assessed changing dynamics of inter-governmental andstate–society relations in the implementation of economic development pol-icy in Northern Ontario. Using an integrated analytical framework thatcombines theoretical insights of policy implementation, organization andgovernance, this discussion has examined various dimensions of FedNor’srelationship with its provincial and local counterparts and with organizedcommunity and private-sector groups in the region.

Viewed through the lens of a multi-actor implementation framework, re-gional economic development policy in Northern Ontario can becharacterized as propelled by the imperatives of political legitimacy and ad-ministrative coordination in policy planning and delivery systems. Policyimplementation, it seems, is a function not merely of public agencies’ intra-organizational integrity and expertise but also of their engagement with, andadaptation to, the external environment. Weaving together theoretical in-sights from policy implementation, organization and governance illustrateshow the implementation process of regional development policy in North-ern Ontario has been moving towards diverse expressions of inter-governmental relations and state–society co-production.

To recapitulate this discussion, as research into policy implementationundergoes a conceptual transformation to focus on concerted action acrossinstitutional boundaries, integrated analytical frameworks that draw fromother theoretical traditions can enrich our understanding and explanation ofimplementation phenomena in complex and dynamic systems. Finally, byanalysing the changing process of policy implementation through a multi-actor implementation framework, this study makes a modest contributiontowards identifying the ‘‘missing link’’ between politics and administration.

Note1 Another such umbrella organization is the Northeastern Ontario Chambers of Commerce, but

this association is rather more loosely and informally organized. Its activities are now re-ported in the web sites of the individual municipal chambers of commerce in the northeasternregion of Ontario (e.g., Sudbury).

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