2003 Volume 3 Pages 106-117
Agencification is intended to separate operating bodies from central departments in the delivery of government services ; thus shifting responsibility for operational management. To show how agencification influences the pattern of control inside the institutional framework of government, we compared Executive Agencies (EA) in the UK with Independent Administrative Institutions (IAI) in Japan.
We examined two operating bodies : the Pesticides Safety Directorate, an EA, and the Agricultural Chemicals Inspection Station, an IAI. There were three interesting findings. Firstly, agencification makes it difficult for operating bodies to manipulate objectives and performance targets they set since they are controlled by performance evaluation. Secondly, compliance with the established control schemes is a considerable burden for the operating bodies. Thirdly, the system introduces pluralistic regulating bodies. Therefore, even though the institutional framework of EA and IAI differs, we find that agencification in both countries results in more formal regulation inside government.
In conclusion, greater relational distance between sponsoring departments and operating bodies restricts the freedom to manage, which is a principal aim of agencification. More formal regulation is designed to satisfy the requirement for greater accountability with respect to operational management of both EA and IAI. More importantly, such institutionalization may result in higher compliance costs, these being the additional expenses that operating bodies have in order to satisfy regulatory obligations inside government such as the expense of additional reporting and compulsory evaluation.
