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A price worth paying? Accountability, red tape and the regulation of affordable housing.

Complaints about red tape and excessive regulation in modern democratic societies often come from those on the right of politics, seeking to exploit the frustrations experienced by ordinary citizens with big government. However, there is also growing concern from many working in public and not-for-profit organisations that deliver publicly funded services about the administrative burdens created by new forms of regulation inside government (Levi-Faur 2005; Hood et al. 2005). Critics of bureaucracy within organisations argue that regulatory red tape and ritualistic bureaucracy divert energy away from productive activities, and have few benefits besides creating work for administrators (Derthick and Quirk 1985; Power 1997; O'Neill 2002). Government departments and managers in large public organisations see regulation as necessary and effective, but still acknowledge and try to reduce the burdens. How do these debates about over-regulation arise in the agencies that deliver government services? Is there any truth to the complaint about ritualistic bureaucacy? Is there anything that government can do to address this problem?

This paper approaches this contentious issue at a theoretical level and through the findings of a qualitative case study. It begins with a discussion of regulation studies, focusing on three concepts employed in understanding regulation by Leigh Hancher and Michael Moran (1998), Julia Black (2002) and John Braithwaite and his associates (2007), and on some recent studies by qualitative researchers. (1) Three related observations are made. First, whatever the differences between the many sophisticated theories--whether economic, legal, psychological or sociological--in conceptualising the origins of regulation and how it functions in a complex society (for a review, see Morgan & Yeung 2007), they mostly assume that regulation is effective, or can be made effective without too much difficulty. Secondly, most theories either ignore or downplay the problem of bureaucratic ritualism and red tape, or believe that it can be solved through regulatory reform. Thirdly, most empirical research tends to focus on the views and experiences of managers and regulators, rather than those affected by regulation, and as a consequence presents regulation in a positive light.

The second section seeks to explore criticisms that are often made of regulation, drawing on a qualitative research project investigating the regulation of affordable housing providers in Australia (Travers et al. 2010a and b). (2) The term 'affordable housing' refers to low-rental housing provided by large not-for-profit organisations that aspire to develop and manage thousands of properties. 'Affordable housing' can be distinguished both from the 'social housing' provided by State Housing Authorities, and from 'community housing' organisations, which may only manage a few properties, although the terms are often used interchangeably (see Travers et al. 2010a, chapter 1). The Australian government hopes that a third sector (Giddens 1994), similar to the successful alternatives to direct state provision in the United Kingdom, will address an emerging housing crisis in Australia (Jacobs et al. 2010). (3) A national system of regulation is a central policy tool intended to create the condition for investment and reduce the risks in transfering public housing stock to housing associations (Australian Government 2010; 2013). This qualitative project examined how housing providers in Victoria, New South Wales, Queensland and Tasmania understood the purpose and effectiveness of regulation, and the problem of administrative burdens or 'red tape'.

The third section will consider how it might be possible to reduce administrative burdens and the experience of red tape in the light of this case study. It suggests that one remedy that has not so far been tried in the public sector would be to measure burdens and compensate professionals for their work in compliance. The conclusion argues that it is possible to maintain a commitment to regulation as part of the welfare state while also being realistic about its failings. Qualitative case studies are valuable in identifying experiences and practices that are not available from quantitative research on administrative burdens.

A positive view of regulation

Regulation studies have developed at the intersection of the academic disciplines of political science, socio-legal studies, public administration, economics, management theory, political science, psychology and sociology. There are all kinds of subtle differences between approaches, and sometimes debates, not least about the best way to conceptualise regulation (Baldwin et al. 1998; Frieberg 2010). This short review will focus on three concepts used by regulation theorists in understanding regulation, but also on some recent qualitative studies that examine the perspective of regulators.

Theorising regulation

There are a variety of ways of conceptualising the relationship between government and society in regulation studies, such as the debates that have taken place between 'public' and 'private theories' of regulation (Morgan & Yeung 2007). Public theorists see regulation as benefiting everyone, and as largely effective. Private theorists see it as arising from economic and social interest groups in a pluralistic society advancing their interests. In the field of housing, stakeholders include providers, tenants, investors and governments (Australian Government 2010:11; Travers et al. 2010a).

Regulatory space

Two American political scientists who have attempted to bridge these oppositions are Leigh Hancher and Michael Moran (Hancher & Moran 1989), who devised the concept of 'regulatory space'. (4) They believe, like the sociologist Talcott Parsons (1951), that a regulated market system will produce social justice, and do not view society in terms of social or economic conflict. Hancher and Moran even argue that it is conceptually mistaken to employ ideas such as 'regulatory capture' (the idea that regulators serve dominant groups), since there is no separation between public and private sector organisations:

Economic regulation of markets under advanced capitalism can thus be portrayed as an activity shaped by the interdependence of powerful organisations who share major public characteristics. ... The fusion is made more complete by one of the features remarked on earlier: economic regulation is an integral part of the modern interventionist state (Hancher & Moran 1998:152).

Regulatory conversations

The taken-for-granted character of structural-consensus assumptions within regulation studies makes it possible for other traditions either to be ignored or absorbed into the field. In a paper on regulatory conversations, the socio-legal theorist Julia Black (2002) reviews a large body of literature in discourse analysis, including approaches such as ethnomethodology, conversation analysis, and critical discourse analysis. Although recognising the possibility that there is 'incommensurability', she suggests at various points that 'discourse analysis and institutionalism could be complementary perspectives' (Black 2002:196).

In proposing an analytic framework in this paper, Black does not consider the problem of regulatory burdens or red tape. This would involve looking at regulation from the perspective of those organisations and individuals being regulated. Instead, the 'regulatory conversation' is understood as something that takes place, or should occur more frequently, between regulators in developing standards, techniques and practices. Those working in a regulatory field are viewed as sharing common interests (there are similarities in this regard to Hancher & Moran's ideas on regulatory space).

The regulatory pyramid

Hancher and Moran (1998), and Black (2002), discuss regulation at a fairly abstract level, and are not concerned about the specific issues that arise for regulatory agencies in their dealings with different organisations. By contrast, other regulation theorists have advanced normative theories that are intended to result in practical benefit through improvements in the effectiveness of regulation. The Australian sociologist John Braithwaite and his colleagues have constructed a theory based on a scientific assessment of the characteristics of different organisations known as the regulatory pyramid. This theory suggests that regulators will achieve most through a mixture of encouragement, persuasion, and threats (for example, Ayres and Braithwaite 1992, Braithwaite and Drahos 2000, Braithwaite et al. 2007).

In their most recent study of the regulation of aged care, Braithwaite et al. accept that regulation in this field often results in ritualistic compliance, without improvements in the standard of care:

Sometimes by design, and sometimes unwittingly, inspectors, nursing home management and care staff engage in the game of regulatory ritual in order to 'get by' in the regulatory society. The outcome is less than desirable care for the frail elderly (Braithwaite et al. 2007:328).

As a sociologist who has worked as a regulator and conducted empirical research, Braithwaite is perhaps the only regulation theorist who recognises, and describes in more than a cursory way, the problems of ritualism and red tape. Like others with a belief in science, Braithwaite et al. (2007) are optimistic for the prospects of improving policy interventions, even if there is disappointing progress. One way forward 'is to craft a new regulatory environment' that combines 'a regulatory model backed by enforcement' and a new 'strengths based model backed by rewards' (Braithwaite et al. 2007:328).

Empirical studies of regulatory work

Since the ethnographic literature on organisational cultures conducted by Robert Merton and his associates (1952), regulation theorists have tended to write about regulation in general terms, without looking too closely at the activities of regulators or the impact of regulation within organisations. There have, however, been observational and interview-based studies describing different 'regulatory styles', and the nature of 'regulatory conversations' (for example, Hawkins 2002; Haines 1998). Most recently, the American law and society researcher, Susan Silbey (Silbey et al. 2009; Silbey 2011), has proposed a theoretically driven program of empirical research, known as 'relational regulation', concerned with investigating how regulation is accomplished by 'social citizens' in different organisations.

Papers in a special issue of Regulation and Governance look at the work of 'attorney generals, middle managers, microloan officers, labor inspectors, security agents [and] environmental health and safety staff' (Silbey 2011:1) in achieving compliance. These empirical studies portray both regulators and regulation positively. Regulators are understood as being epistemologically and morally privileged in understanding and appreciating the wider context that shapes our actions. Regulation is presented as largely effective, without considering the issues raised by Sam Sieber (1981) and Michael Power (1997) such as whether the effectiveness is achieved through gaming the system. (5) Instead, 'relational regulators' are portrayed as recognising 'the impossibility of perfect conformity between abstract rules and situated action while nonetheless managing to keep practices within a band of variation surrounding, but not perfectly coincident with, regulatory specifications' (Silbey 2011:1).

Another feature of this ethnographic or observational literature is that studies focus on regulators, whether based externally or inside organisations, rather than the professional or other staff affected by regulation. In a study about health and safety regulation in a scientific laboratory, Huising and Silbey (2011) praise regulators for their abilities to deal with scientists who are stubbornly resistant to safe working practices, or hope that the regulatory scheme, like other management initiatives from the past, will go away if ignored. There is little attention given to the perspective of those being regulated. One objective of this paper is to examine the other side of the 'regulatory conversation' (Black 2002), with the aim of understanding the nature of regulatory burdens. (6)

An empirical study: early steps in the regulation of Australian affordable housing

The study reported in this paper concerns housing regulation in Australia. It is funded by a government research institute, and draws on interviews with: senior managers in regulatory agencies; some of the organisations subject to different types of regulation; and NGOs concerned with this area of policy in Victoria, New South Wales, Queensland, and Tasmania (Travers et al. 2010b). (7) Housing providers were selected drawing on information obtained from regulators, or in the case of Tasmania through the State Housing Authority. Most CEOs were happy to give their views about the emerging regulatory system, and some arranged group interviews with their management team. The research questions focused on views on regulation during 2009, when the Australian government was consulting on the benefits of establishing national regulation (Australian Government 2010). This was launched in July 2013, and implemented in early 2014, creating a system of regulation that is intended to reduce administrative costs for housing providers operating across state boundaries (Australian Government 2013). (8)

The policy context

Housing is a major social issue and potential problem in Australia, with growing concerns expressed by NGOs and politicians about housing strain and homelessness. Australia has a small public housing sector, and unlike the United Kingdom and some other Western European countries, has not developed a large third sector in which housing is provided by housing associations and other not-for-profit organisations. (9)

The policy objective is to increase the amount of affordable housing through investing in these organisations. Providers use this public funding to leverage loans from banks. In addition, the government plans to transfer public housing stock that will also make the associations more attractive to private investors. (10)

The purpose behind regulation is to provide the institutional conditions to allow this expansion. Regulation is intended to make providers accountable, ensure good financial practices, create confidence among investors, and protect tenants (Australian Government 2010; 2013). (11) Financial support from the state is given subject to contractual obligations to let properties at affordable rents. In 2009-10, there was an emerging system of regulation in particular states. Since July 2013, there is a national regulatory framework (Australian Government 2013) that seeks to encourage housing associations to become large national organisations capable of supplying affordable housing on a larger scale. (12)

Methods

There have been many quantitative studies about the administrative burdens created by regulation. Some are based on calculating burden hours (McGregor-Lowndes & Ryan 2009), and others have examined the factors that influence perceptions of bureaucracy and red tape (Bozeman & Feeney 2011). Interview studies can go further in identifying processes that are concealed in a statistical analysis of inputs and outputs (Blumer 1956). In this case, the aim was not to suggest 'red tape' as a problem when approaching organisations, or to make assumptions about the effectiveness or value of regulation, but to ask regulators and housing providers to talk about their experiences and practical concerns (for a similar approach to studying management, see Iszatt White et al. 2011). (13) Forty-six interviews were conducted in four states, 25 with CEOs,

senior managers or compliance officers working in housing associations that had registered in Victoria, New South Wales and Queensland, 15 with regulators and their staff, and 6 with NGOs or investors (see Table A1).

In each state we focused on providers (Milligan et al. 2009) that developed or let between a few hundred and in some cases over a thousand properties. The government hopes that these organisations will grow to become the new third sector, assisted by regulation. We did not approach community associations that may manage only a few properties and were not registered. Unregistered organisations are most likely for ideological as well as practical reasons to oppose regulation, or see registration as burdensome. By no means all the interviewees in these registered provider organisations saw the work involved in registration and annual reporting as burdensome or as 'red tape'. Most concerns were expressed by organisations in Victoria, which may reflect the approach adopted by the regulator in that state. The experience of a burden was greatest for the management team of a small registered provider managing a few hundred properties, but which was of sufficient size to be registered in Victoria (Provider E), although not every small registered provider reported burdensome regulatory requirements. There were also concerns expressed by providers in Queensland and in Tasmania--a state that did not have a regulator--regarding administrative burdens caused by regulation through contracts. (14)

This paper will focus on the views expressed by regulators, and by CEOs and senior managers in housing associations in Victoria and New South Wales that were subject to state regulation. Some of the providers interviewed believed that regulation was necessary to give the appearance of accountability, but could not achieve other objectives such as improving performance and reducing risks. Regulation did, however, result in significant administrative burdens.

The purpose and effectiveness of regulation

In proposing the new regulatory system, the Australian government has argued that it has a number of benefits. It makes providers accountable for investment received from government, including stock transfers. It also results in more investment from banks, and increases the quality of financial management and service delivery, both through accreditation--partly designed to concentrate funding in large organisations--and annual inspections. Some providers were sceptical about these broader objectives.

Regulation as a means of improving performance

One justification for a regulatory system is that banks would need this reassurance when making loans to housing associations. However, some CEOs argued quite forcefully that assurance from the government made no difference to commercial decisions, even in those states where regulators had the power to transfer assets from companies in financial difficulties:

I don't think they care about that. They just want to see we have the income coming in that will service the debt. My experience with banks is they say, 'Yeah we know you have regulators because they come and try to talk to us, and we send underlings to have cups of tea with them'. But they are far more interested in not foreclosing than they are in the fact there is a dubious non-guarantee, that there is a wink and a nod from government, if it all goes pear-shaped. (CEO, Housing Provider A).

This interviewee also questioned whether regulation caused providers to become more professional. The registration system had forced some providers to amalgamate, and take on professional staff. He believed that this would have happened in any case, without the requirements of registration:

We have to enter in contracts with builders and architects. You need a proper framework to work within and you need risk management policies ... You have to assure the banks you have cash flow and make 15-year projections, and show you're viable. We are doing this all the time ... We have our own consultants who look at the business plan. They check that we have the capacity to repay debt ... We also check how well we manage our tenants ... Regulation is helpful because it tells us what to do. (CEO, Housing Provider A).

Another CEO suggested that professional standards existed and were developing prior to regulation. This makes government sound almost like a parasite feeding off the social worlds that already exist in civil society (see Derthick & Quirk 1985), rather than having a steering function or driving best practice.

Accountability

This indicates a significant difference in perspective between regulators and those organisations being regulated, and had the potential to cause friction, even though they were working together in this 'regulatory space' (Hancher & Moran 1998). They did, however, agree that regulation was necessary for accountability:

Most of our money comes from government and I think we need the accountability structures that have been put in place. I've got a suspicion that if you didn't have the regulation, you'd get sharks in this industry just as you have them in any other industry. You need a regulator and to be accountable to the community you serve in this game. (Financial Officer, Housing Provider C).

The problem that arises is that if accountability is the only benefit, it is difficult to accept the administrative burdens. The perception that regulation has little value beyond accountability may be why governments have failed to reduce negative perceptions of red tape.

Perceptions of red tape

To be accredited, institutions were required to demonstrate, among other things, that they had the right policies and staff. The task of the regulator was to monitor performance annually, and provide feedback. This had already developed through a process of learning from mistakes and deciding what financial information was needed to make an assessment:

We looked at how to monitor compliance with legislative requirements and established comprehensive annual reporting that encompassed performance against standards, compliance with other regulatory requirements, and continuous improvement and business planning. (Housing Regulator, Victoria).

Staff employed by the regulators were concerned with making the process work. They took the policy objectives for granted, although they were dissatisfied about the level of resources available for checking applications and giving feedback. They also complained about the cavalier attitudes of providers who did not submit information on time, or in the right format. Although this research project did not go beyond interviewing, it seems likely that the day-to-day work of operational staff had much in common with Silbey's (2011) 'relational regulators'. They exercised persuasive skills, and developed practical expertise in getting the job done for all practical purposes (Garfinkel 1967) with the time and resources available.

Many of the housing providers being regulated had a different view, focusing on the burdens created by the accreditation process and annual reporting. The price to be paid for accountability, in what Powers (1997) calls the audit society, is an increasing amount of administrative work around reporting: what is often described as 'red tape'. This should initially be placed in quote marks because, as Gouldner (1952) noted, it is experienced or interpreted differently according to whether you agree with the objectives of regulation. Some government officials, managers and academic researchers appear almost blind to the phenomenon, or see this as a pathological response of alienated employees. One interviewee reported that, despite the concerns expressed in the Cave report (2007) about housing regulation, and in the Hampton report (2005) about inspectorates generally, in his experience from working as a regulator, 'there is no such thing as over-regulation'. (15)

It was also true that many staff in organisations being regulated had no need for the concept. 'Red tape' was simply equivalent to the requirements of their institutional environment. If regulation meant having to hire additional staff, or spend a large amount of management time and resources on reporting, this simply became part of the business plan. Nevertheless, there were also many interviewees who saw red tape as a significant problem creating administrative burdens and ritualistic, unproductive work. For this reason, the term has mostly been used without quotation marks in this paper.

Administrative burdens

Some interviewees commented on the amount of time and resources taken in complying with regulation:

It was a lot of work. I was working three days a week and two days were spent on that for six months. I think we lodged it at the end of 2007 and then in August 2008 we became registered. But before that we were getting our policies and procedures in place. (CEO, Housing Provider L). It took 76 hours, this is dedicated work, to get that financial template finished this year. That's being conservative. It took a lot more time than that. I just went through my diary and added it all up. Because it is very time-consuming. (Finance Officer, Housing Provider E).

More generally, growth in the sector, and regulation through a number of different mechanisms, resulted in both professionalisation and bureaucratisation:

We've built an organisation from 60 people in February 2009 to 120 people in December 2009. That's a massive growth and we need that to deliver everything. Interestingly, only seven of the staff are in building and development. All the rest is quality management and risk management. These are the people you need to stop the organisation imploding under growth pressures. (Property Manager; Housing Provider A).

Reporting work

The following account given by a compliance officer (Housing Provider C) gives a taste of what was involved in routine administrative work required by the regulatory system. She was explaining the work behind completing an annual check list:

P: So if I can show you our annual report to the regulator. It has the KPM [key performance measures] data. Here is the final report we put in. It starts here with our name, all that sort of stuff. It asks for KPMs.

Q: So it asks here the number of times the Board met in quorate for the last 12 months.

P: 12 times. But in true fact the Board met 16 times. But they go, 'OK we only want quorum meetings', they do not want special meetings. Then they want supporting data. What is a Board quorum? In our constitution, it is three, but a number of extra Board meetings are held. Well I would say the number of times the Board met in quorate was actually six, and it should be up in there, but they are saying no, so it is not very clear.

Q: I see you've complied 100 per cent, having been required to have had 12 meetings. But then you've put in an explanation.

P: Well yes, I think it needs some sort of explanation. Looking down, you see we have a finance reference group.

Q: And active Board members.

P: Yes they want to know the percentage who have come in. So you have to calculate everything. But we had one member who never came but participated through email. He was an active member.

The difficulty for this administrative officer lay in interpreting a set of instructions that did not allow her to enter information that was meaningful to the housing provider, and might even give the misleading impression that it had fallen short of quality standards. But the staff on the other side of this 'regulatory conversation' (Black 2002) were not prepared to meet the organisation half way. According to this officer, correspondence on what was required could go on for a few months. In addition, the regulator in this state required providers to submit a detailed financial projection for 15 years. But from the perspective of the organisation, this had no value given that it was impossible to predict even beyond the next year. One CEO of a housing association described the financial reports--requiring many hours of work--as 'fantastical'. The information was required by the regulator, but added nothing to what he already knew about the risks in taking on new business. This involved inherent risk in any case, since it depended on the government continuing to fund housing providers.

There was also scepticism about the value of feedback, one justification for regulation that goes beyond accountability. As with professional groups subject to quality assurance initiatives, there was some cynicism over whether regulators could understand or assess their work without knowing more about the context. They also complained that the regulators were not able to provide timely feedback:

The reporting is extremely resource-intensive, time-consuming, and it changes constantly. The Office of the Registrar, the regulator, is constantly adding requirements to it, seeking more information; different sections of the department are asking for different information, so sometimes you are just reporting and reporting for the sake of reporting. And it's not clear what happens at the other end with all this collected data (Financial Officer, Housing Provider C).

The other thing is we dutifully send the report and then the months go by and we wonder where has it gone, into the ether somewhere? This all happens in August and finally they might come back in March of next year with a report. And there's nothing really there aside from tick tick tick to say how you might measure up against a comparable organisation (CEO, Housing Provider F).

The difficulty for any regulator is that going beyond a tick box approach requires considerable resources. In practice it is difficult providing meaningful feedback, even about financial risks, in organisations that are growing rapidly and have changed considerably between annual reviews.

Understanding regulatory burdens

The case study reported in this paper adds to the relatively few studies that have investigated the experience of red tape beyond calculating the time taken in compliance. Braithwaite et al. (2007) looked at an industry that had been subject to regulation for many years, and in which the problem of ritualism was worsening. This study looked at the commencement of formal regulation in a different field. It is striking that even at this early stage there was considerable frustration created by the regulation. Although each area of social life subject to regulation differs considerably, a case study makes it possible to identify what can go wrong and suggest some remedies (Feagin & Orum 1991).

Although the public administration literature recognises a subjective in addition to an objective dimension to red tape, there has not been much recognition of the ideological or principled factors that colour responses. For example, some health professionals resent evidence-based medicine not only because of the bureaucratic work, but also because of the assumption that medicine should be standardised, and that local judgement no longer matters (Timmermans & Berg 2003). Some lecturers dislike quality assurance regulation that seeks to standardise their teaching to improve efficiency (Strathern 2000; Travers 2007). This case study shows that, even without principled objections (see also Haney 2012 on psychotherapists), there can still be a perception of red tape. (16) Three factors seem important in leading to this perception: whether regulation is seen as making a difference to services beyond accountability; whether the measures used are meaningful; and the resources available for compliance.

Many working in these not-for-profit organisations did not believe that regulation improves performance through adding to existing quality assurance systems, or to the discipline of the market. Their frustrations arose partly because the regulation was seen as having no purpose beyond accountability. Government departments, regulators, and many regulation theorists often make greater claims than this. They see regulation as reducing risks or even as the driving force behind 'continuous improvement'. The perception of red tape in this area of government services arises as much from the tension or disjunction between these different perspectives, as in the adminstrative work created by regulation.

In addition, this study about the regulation of housing providers suggests that how regulation is implemented may be important. It may be possible to make regulation more meaningful by changing particular procedures and requirements to supply information. Critics of regulation had no confidence in some measures employed to assess performance, such as counting attendance at Board meetings, or in one state financial plans for a 15-year period. They wanted more timely feedback that was relevant to their actual activities, and they wanted a more open regulatory conversation. There has not been much ethnographic research on these processes, partly because few organisations have been willing to allow this type of scrutiny. (17)

A third factor that may be important in determining levels of frustration is the amount of resources available to those being regulated. Although no one has tried to conduct a qualitative comparison in different public sector organisations (although see Bozeman & Feeney 2011), it may be that levels of frustration are low in these housing providers. The larger housing providers were able to employ additional administrative staff to meet regulatory demands. This suggests that one way of reducing the burdens in more ideologically charged areas might be to recognise the time involved in reporting work, and compensate the organisations subject to regulation.

Conclusion

Many theorists and researchers in the international, interdisciplinary literature in regulation studies recognise the potential problem of excessive regulation across the public and not-for-profit sectors supported by government funding (for example, Baldwin & Cave 1999, Haines 2011). However, they often tend to be quite positive towards regulation or optimistic about the prospects for reducing ritualism and red tape. Braithwaite et al. (2007), after describing in some detail the problems relating to ritualism in aged care, hoped for a change in institutional culture. They believed that it is possible for a regulatory system to empower staff and elderly people, and through this 'find a path to build strength in the midst of seemingly inexorable enfeeblement' (Braithwaite et al. 2007:329).

This qualitative case study suggests that the problems may be even more pervasive than Braithwaite et al. suggest, and cannot easily be solved by 'a change in institutional culture'. One finding is that the perception of a burden can arise partly because exaggerated promises are made for the benefits of regulation in improving services. The national regulatory framework for housing, introduced in 2013, has been presented as a potential solution to a growing housing crisis in Australia (Australian Government 2010; 2013). However, regulation by itself cannot address the crisis, nor can it secure substantial private sector investment without substantial investment from the state in affordable housing. (18)

This case study also has implications for regulation theory. This large and diverse body of theory developed as a defence of the welfare, interventionist state against calls by right wing thinkers for deregulation during the 1970s and 1980s (for example, Hayek 1978; Derthick & Quirk 1985). Theorists sometimes express satisfaction that neo-liberalism has not resulted in a dramatic reduction in the size of government, but instead an expansion in the regulation of private and public sector organisations, ever-increasing numbers employed in fields such as evaluation or quality management, and new tiers of management (Levi-Fahr 2005). The persistence of problems in public and private sector agencies, despite over twenty years of auditing and inspection, might alternatively suggest that regulation by government agencies either makes no difference (19) or has unintended consequences that are more damaging than the potential harm it was designed to address.

Governments facing financial challenges accept that accountability could be achieved with simpler procedures, and at a lower cost, even if this is difficult to achieve in practice. Even the 2007-8 Global Financial Crisis arguably has not had much impact on the amount of regulation or the size of the state. Despite the 'bonfire of the quangoes' in Britain following the election of the Coalition government in 2010 (Tapsfield 2010), the larger inspectorates, such as Ofsted, and the various health and care regulatory agencies have survived, even though they have fewer resources to conduct inspections. The Coalition government in Australia, led by Tony Abbott, has also proposed reducing regulatory burdens, especially on small businesses.

A controversial proposal made in early 2014 was to abolish the charities regulator established by the previous Labor government, the Australian Charities and Not-for-profits Commission (ACNC). Many charities protested that this would damage the sector, and that the ACNC reduced administrative burdens (Owens 2010). However, this report also states that many 'Catholic educators and charities' complained that 'the new system duplicates many existing state regulations while providing little additional transparency'. One conclusion might be that the problem of red tape exists, irrespective of how this sector is regulated. Interviewing managers and front line staff might reveal similar experiences and perceptions to those in the provision of affordable housing, although there might also be differences.

Governments recognise the problem of over-regulation through requiring agencies to submit regulatory impact statements in the hope that this will improve practices. (20) There are, however, no easy solutions in a politicised field. What seems like sensible light-touch regulation to a housing provider might be viewed as 'regulatory capture' or 'self-regulation' from the perspective of NGOs representing tenants. Despite the hopes of some theorists (for example, Braithwaite et al. 2007; Bozeman & Feney 2011), we do not have a science that can decide what regulation is worthwhile or effective, or whether measures such as compensating organisations and practitioners for their time might reduce the frustrations. As a first step in developing this science, it would be helpful if further qualitative studies of regulation in different organisations and professional fields were undertaken to examine not only the views and experiences of regulators, but also those subject to regulation.

Acknowledgements

I would like to thank colleagues who contributed to the reports published in 2010 by the Australian Housing and Urban Research Institute (AHURI). The article benefited greatly from comments by two reviewers.

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Endnotes

(1) There is a large inter-disciplinary literature on regulation, bureaucracy and red tape. This includes commentary and discussion of the new public management (for example, Hood et al. 1999; Christensen & Laegreid 2011), and empirical studies about perceptions of red tape (for example, Scott 2002; Bozeman & Feeney 2011).

(2) This study was conducted by a team of researchers from different disciplines and with different theoretical and policy interests. I would not expect the other researchers, or the Australian Housing and Urban Research Insitute (AHURI) that funded the study to share my interpretation of the data, although we all see administrative burdens and 'red tape' as a problem that could affect the development of housing regulation.

(3) For a review of this policy in the United Kingdom, see Pawson & Mullins (2010).

(4) In housing studies, Morag McDermot (2010) has presented this concept as compatible with ideas from critical theorists such as Lefebvre, Foucault and Bourdieu on how power is exercised by dominant groups.

(5) There is no critical reflection on the wider forces that may influence the accident rate at work, such as the pressures on laboratories to compete or achieve goals within unrealistic time frames (Vaughan 1996).

(6) Black (2002) views the 'regulatory conversation' as both a means of studying the work of regulators from an interpretive perspective, but also normatively (2000) as a means of improving the effectiveness of regulation. 'Proceduralising' means that the regulator engages with the organisations being regulated in order to obtain consent to the regulation and identify any procedural problems. This approach does not, necessarily, recognise all the frustrations and misunderstandings that take place from either side of the conversation, since it is assumed that these can be alleviated.

(7) Research was conducted in Victoria, New South Wales, Queensland, and Tasmania (a state in which there was no regulator). The aim in this paper is not to describe the distinctive character of regulation in each state, but how providers experienced burdens in general terms.

(8) See http://www.nrsch.gov.au.

(9) For reviews of the development of housing associations in the United Kingdom, see Malpass (2000), and Pawson & Mullins (2010); and for a more critical perspective, see the recent special issue of Critical Social Policy on housing policy (Hodkinson, Watt & Mooney 2013).

(10) Milligan et al. (2013:19) report a growth of 217 per cent in the total assets of 34 'leading' not-for-profit housing associations between 2008-09 and 2010-11. $800 million 'in private lending facilities' had been obtained in 2011.

(11) In fact, few measures are required by this regulatory system to protect tenants beyond the government monitoring the financial management of housing providers and the affordability of housing. This might be contrasted with the greater emphasis on the interests of tenants in the regulatory system in the United Kingdom (Cave 2007).

(12) One objective was to 'reduce the regulatory burden on housing providers working across jurisdictions' (Australian Government 2013).

(13) This research project considering regulation was funded by the Australian Housing and Urban Research Institute (AHURI). Ethics approval was obtained from the Human Research Ethics Committee in Tasmania for a minimum-risk project that involved interviewing senior managers in public sector and not-for-profit organisations.

(14) A CEO in Queensland complained about contactual mechanisms through which the State Housing Authority controlled its activities: 'Everything we do is under scrutiny ... I've never known an organisation to be under this level of scrutiny. It breaks down relationships and creates so much work and duplication of effort. Ever since I have been here it seems to have got worse' (Large provider R).

(15) The Cave report (2007) was a review of housing regulation in the United Kingdom that attempted to balance the interests of providers and tenants. There were concerns expressed by some providers, but not by tenants' groups, about over-regulation. The review resulted in the creation of the Tenants Services Authority, an agency that was subsequently abolished in the 'Bonfire of the Quangos' (Tapsfield 2010). The Hampton report (2005:3) was a general review of the 'administrative burden of regulation on businesses' in the United Kingdom. The report recommended that the need for inspections could be reduced by a third through risk assessment, and proposed a consolidation of key regulatory agencies.

(16) There are fewer principled objections from housing providers when compared with professional groups affected by regulation since the Australian government has not so far required a great deal of monitoring of services provided to tenants, although the regulatory system does seek to 'improve tenant outcomes and protect vulnerable tenants' (Australian Government 2013). Debates in the United Kingdom often take the form of a contest between providers and tenants' groups, each seeking to influence the regulator (see Cave 2007).

(17) McGregor-Lowndes & Ryan (2009) note that organisations face an additional burden through supporting research on red tape. This could also be viewed as ritualistic if the burdens are not reduced.

(18) For a review of affordable housing in Australia, and the strategies that government could pursue to address the housing crisis, see Milligan et al. (2013).

(19) To give one example, aged care services in Britain are provided by the NHS and private companies, and in each case are heavily regulated. However, this has not prevented a decline in standards (Ross 2011).

(20) For a review of measures within government to reduce regulatory burdens, see Banks (2003) and Travers (2007).
Table 1: Interviews in four states

                 Interviewee types

Victoria         Large provider A--Housing Services Manager,
21 interviews    Manager Strategic Partnerships

                 Large provider B--Housing Manager

                 Large provider C--CEO, Regulation Compliance
                 Officer, Development Officer, Financial Officer

                 Small provider D--Housing Manager

                 Small provider E--CEO, Finance Manager, Housing
                 Manager (group interview)

                 Small provider F--CEO

                 Small provider G--CEO, Housing Manager, Finance
                 Manager

                 Regulator--Director, Office of the Registrar
                 (two meetings), two inspectors (group interview)
                 Investor

                 Tenants' advocacy Group (joint interview)

Tasmania         Housing Tasmania--three managers (group interview)
6 interviews
                 Large provider H--Housing Manager

                 Large provider I--Managing Director

                 Small provider J--Housing manager

                 Tenants' advocacy group

NSW              Regulator--The Registrar
10 interviews
                 Community Housing Division--three managers
                 (two group interviews)

                 Large provider K--Senior Project Officer

                 Large provider L--CEO, Social Housing Manager
                 (group Interview)

                 Large provider M--CEO

                 Large provider N--Executive officer, Operations
                 manager (group interview)

                 Large provider O--CEO

                 Small provider P--CEO
                 Tenants' advocacy group (joint interview)

                 Peak body--Executive officer

Queensland       Large provider Q--CEO
9 interviews
                 Large provider R--CEO

                 Small provider S--CEO

                 Small provider T--CEO

                 Small provider U--CEO

                 Investor

                 Regulator--Executive Director, Social Housing
                 programs, regulatory team (group interview)

                 Tenants' advocacy group

                 Tenants' advocacy group
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Author:Travers, Max
Publication:Australian Journal of Social Issues
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Date:Jun 22, 2014
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