Compacts between government and the not-for-profit sector : a comparative case study of national and sub-national cross-sector policy frameworks

Policy interest in the not-for-profit (NFP) sector has grown in step with government’s interest in leveraging the capacity of non-state players to perform service delivery functions. Once consigned to the periphery of policy-making, the NFP sector is now widely accepted as an essential player in a mixed economy of service provision. Increasingly, the achievement of public policy objectives requires working collaboratively across sector boundaries. Government’s engagement with NFP service providers has, on many occasions, been found wanting. The use of competitive tendering and contracting for the purpose of leveraging greater economic and technical efficiency, choice, responsiveness and innovation in the delivery of selected statutory public services has introduced a range of tensions, contradictions and externalities including failures to fund the full cost of service delivery, the uncertainty of year-to-year contracts, burdensome reporting and compliance requirements, and the substitution of competitive behaviours for collegiality among NFP providers. In the process, the role of NFP organisations as sources of policy advice and legitimacy were devalued. Governments around the world have attempted to regularise relations with the NFP sector through the adoption of formal cross-sector policy frameworks – or ‘compacts’. Compacts serve a number of purposes, some explicit, others implicit. Explicit purposes include the regularisation of relations between the public and third sectors by establishing agreed rules of engagement; creating pathways for investment in sector capacity and capability; and enunciating the values and behaviours required for effective cross-sector working. Implicit purposes include a desire by governments to better manage the politics of their relationships with the third sector, and a desire by the sector to re-weight its policy influence within a strongly asymmetric relationship with government. This research takes the form of a comparative multi-case study and relies upon a rich primary and secondary literature, supplemented by interviews with elite policy actors in Australia and New Zealand. It aims for a deep contextual understanding of the range of factors contributing to the spread of compacts amongst Anglo-Saxon jurisdictions. Employing Kingdon’s (1995) process streams analysis as a heuristic framework for analysis, this thesis seeks to understand why cross-sector policy frameworks have entered onto the public policy agenda in the UK, Canada, Australia and New Zealand. In Kingdon’s schema, ‘policy windows’ open when three ‘process streams’ converge: the problem stream, the policy stream and the politics stream. The prospect of any solution attaining high ‘agenda status’ can be enhanced by the efforts of ‘policy entrepreneurs’ capable of recognising and exploiting those ‘policy windows’. This study finds that in each of the jurisdictions examined, formal proposals for compacts or similar frameworks have: (a) been preceded by a broad recognition that aspects of the relationship between government and the NFP sector have become problematic; (b) been promoted within various policy communities as a feasible solution to acknowledged problems; and (c) entered onto the public policy agenda at politically propitious moments. The study found that the implementation and impact of cross-sector policy frameworks is highly variable. Nevertheless, political and policy attachment to compacts and similar frameworks appears to be on-going.

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