THE REGIONAL ECONOMIC DEVELOPMENT PARADOX: ATTEMPTING POLICY ORDER IN THE FACE OF SOCIETAL COMPLEXITY.
Pugalis, Lee ; Keegan, Darren
THE REGIONAL ECONOMIC DEVELOPMENT PARADOX: ATTEMPTING POLICY ORDER IN THE FACE OF SOCIETAL COMPLEXITY.
1. INTRODUCTION
Regional economic development is an evolving policy field as it
responds to new social, economic and environmental opportunities and
challenges (Pugalis and Gray, 2016; Stimson et al, 2006). As a highly
politicised policy domain it takes different shapes and forms over time;
moulded by the interests, ideologies and power dynamics between
different constellations of actors competing and interacting in, through
and across particular places. Hence, analyses of regional economic
change and development require territorial sensitivity, which supports
the use of case studies.
In spite of a chequered history in Australia, where
"successive governments at the federal level have shied away from
committing significant resources to regional development" (Pape et
al., 2016: 913), regional economic development, in its various guises,
is deployed throughout the majority of the country's diverse
landscape--notably from a national perspective, although certainly not
exclusively, through the Regional Development Australia (RDA) program.
According to the Commonwealth Government, the RDA program "is a
national initiative which seeks to grow and strengthen the regions of
Australia. Comprising 55 Committees, the RDA network covers
metropolitan, rural and remote regions across the country"
(Commonwealth of Australia, 2015a: 3).
Notwithstanding, entities such as RDA Committees attempt to promote
an ethos of working in partnerships, yet a shared understanding of the
nature and purpose of regional development is lacking (Regional
Australia Standing Council, 2013). Even so, extant literature, such as
the definition provided below by the Institute of Economic Development,
indicates that regional economic development is generally considered to
refer to:
"A set of policies and actions designed to improve the
performance of a spatially defined economy for the benefit of all
residents".
Such definitions and interpretations of regional economic
development reveal the dual objectives of economic growth and social
equity, which are not necessarily complimentary, and also demonstrate
the interactions between attaining policy order in the face of societal
complexity through seeking to implement a 'set of policies and
actions' and 'define' spatial economies.
Whilst it remains a contested activity, the conventional wisdom of
orthodox regional development practice--often pursued by local, state
and national governments--extols the need to embrace complexity,
recognise ambiguity and account for multiplicity, whilst simultaneously
managing uncertainty and risks through imbuing policy order and control.
To embrace and work with complexity, uncertainty and fragility (see, for
example, Sorensen, 2016), which according to Taleb (2012) are key
features of contemporary society, those leading and practicing through
the manifold types of regional economic development organisations (RDOs)
are expected to navigate intricate spaces and networks at the interface
of complex governmental and regional socio-economic systems. For
example, the RDO faces evolving government systems, which include new
modes of service delivery, fiscal tools, accountability frameworks and
networked-based forms of governance (see, for example, Ziafati
Bafarasat, 2016). Nevertheless, many governmental functions and
policies, which are instrumental to the development of regions, such as
the 'backpacker tax', are 'space-blind' and remain
well beyond the purview of RDOs (Pugalis and Gray, 2016).
Changes to regional socio-economic systems are also altering the
functions and performance of 'regions', including changing
methods of industrial production, the ongoing decline of manufacturing
as a share of the regional Australian economy, demographic shifts and
evolving patterns of migration, and entrenched forms of uneven
development (Commonwealth of Australia, 2015a). In terms of the latter,
this same report suggests that the further an Australian lives from
metropolitan areas the less income they will have (except in mining
dominated remote areas), and they will have on average worse health
outcomes and suffer more from mental health issues.
The ambit of this conceptual paper is to investigate what we refer
to as the regional economic development paradox, which attempts to
instil policy order in the face of societal complexity. The research is
intended to inform contemporary debates concerning the efficacy of one
notable type of RDO; the RDA Committees, which at the time of writing
the program is in the midst of an independent review (See:
https://rda.gov.au/review/). New South Wales (NSW), which has a long
history of regional economic development policy, which can be traced
back to at least the 1940s, provides the setting for empirical analysis.
The New England North West Region of New South Wales Australia, located
inland between the state capital cities of Sydney and Brisbane, provides
a case study to investigate the interface between government and the
regional socio-economic systems as we examine the role of the RDA
Northern Inland Committee (RDANI). This case study provides an entry
point to consider the suitability of the present configuration of RDA
Committees.
The research approach passed through four key phases. Firstly, a
twin-focussed review of scholarly literature about RDOs and complexity
theory was undertaken to help situate the study in a broader theoretical
context. Secondly, RDANI was selected as a case study as the literature
and soundings with practitioners indicated that the 14 RDA Committees in
NSW share some commonalities in terms of organisational structure and
priorities, and to a lesser extent exhibit some similar traits with the
54 other RDA Committees in Australia. Given the aim of this article, one
RDA Committee was considered sufficient to highlight the influence of
the single phenomenon (Gerring, 2004) of complexity and its potential
influence on managing uncertainty. The case study approach was used to
provide a boundary for analysis and to increase our understanding of
social problems (Gomm et al., 2009), which in this instance was an
indication of present and future challenges facing RDA Committees
(however findings from a single case are not intended to be
representative of all RDA Committees). In addition, the
researchers' familiarity with RDANI and the region was also a
factor in the selection process. Thirdly, empirical material from RDANI
was analysed according to the conceptual perspectives identified in
phase one. Fourthly, the conceptual framework was applied to RDANI as an
organisation to identify key new insights of wider relevance. The
remainder of this paper loosely mirrors the key stages of research.
2. CONCEPTUALISING STATE-SPONSORED REGIONAL DEVELOPMENT
ORGANISATIONS IN AN AGE OF COMPLEXITY
The practice of regional economic development in Australia has been
and remains institutionally and operationally complex, and involves a
multitude of actors from different civic, economic and social spheres
(Collits, 2008). Similar to trends in other States and Territories of
Australia, and consistent with some international experiences (e.g.
English regional development, see Pugalis and Townsend, 2012), regional
development policy in NSW has ebbed and flowed as it has been found to
be in (political) favour and out of (political) favour at various
junctures since the twentieth century. In view of this experience, and
informed by a view of regional development as a state-sponsored
activity, Beer (2007: 131) acknowledges institutional complexity by
arguing "that regional development in Australia is hampered by the
outcomes of our system of federalism, by political ideologies grounded
in neo-liberalism that are wary of direct interventions in regional
economies, and by an emphasis on short-term political responses, rather
than longer term strategic interventions".
The diversity of RDOs can be bewildering and includes consultative
committees, advisory boards, statutory bodies, development agencies,
aboriginal corporations, voluntary bodies and partnerships, branches or
agencies of government (e.g. local or state), business chambers, and
private companies. Mountford (2009) distinguishes between five types:
1. Development and Revitalisation Agencies (lead urban
redevelopment processes).
2. Productivity and Economic Growth Agencies (lead employment,
entrepreneurship, and innovation processes).
3. Integrated Economic Agencies (integrate a wide range of
interventions).
4. Internationalisation Agencies (focus on international
positioning or promotion).
5. Visioning and Partnership Agencies (focus on long term strategy
making).
Focussing on state-sponsored RDOs (i.e. those initiated, promoted
and/or predominantly resourced by a branch of government), this
particular type of RDO can be conceptualised as institutional entities
that are established, mobilised and deployed to oversee, lead and/or
implement regional development ambitions, variously codified in a
plethora of documents, such as, strategies (NSW Department of Industry,
2015) and regional growth plans (NSW Government, 2016). These
institutional arrangements are continually being reconstituted to
greater or lesser degrees; shaped, for example, by competing,
complimentary and coevolving actor interests, and changing spatial,
economic and political conditions. State-sponsored RDOs are, therefore,
constellations of diverse policy networks: "more or less stable
patterns of social relations between mutually dependent actors which
form themselves around policy problems or clusters of resources and
which are formed, maintained and changed by a series of games"
(Klijn et al., 1995: 439). Whilst these are often comprised of the
'usual suspects', including political and economic elites,
more marginal actors (i.e. those outside of the political and economic
elites) can also be influential (Pape et al., 2016). Hence, not all
state-sponsored RDOs are top-down bodies.
The nature of institutional arrangements performs a powerful role
in shaping understandings of economic development (Douglas et al., 2009;
Pugalis and Tan, 2017). Thus, whilst the organisational forms of some
RDOs can appear bounded, in institutional terms they are products of
relationships, multiplicity, and heterogeneity, and, thus, always under
construction (cf. Massey, 2005: 9).
It has been observed that state and federal governments have
preferred to deploy 'independent' RDOs (at arms-length from
local politics), although these independent entities have often
struggled to engender local influence and commitment (Beer et al.,
2005). However, not all RDOs are state endorsed or sponsored, and their
variegated institutional forms, include informal networks, soft spaces
of governance and fleet-of-foot partnerships as well as
'official' government entities and statutory bodies. Based on
the results of previous research, which identified over 1 000 RDOs
operating throughout Australia (Beer and Maude, 2002), this quantum
suggests that RDOs are intended to be the primary interface between
complex governmental and regional socio-economic systems (See, for
example, the mission statements and goals of RDOs). Nevertheless, given
that multiple RDOs typically operate across a single geography, it is
not always apparent which RDO takes primacy.
The multiplicity of state-sponsored RDOs is an outcome of complex
intergovernmental relations. The roles and interactions between each
tier of government in regional development policy remains ambiguous and,
thus, open to considerable contestation (Pape et al., 2016).
Historically, the relationship between the NSW State Government and
local government could be characterised as being adversarial, although
this fluctuates over time, space and policy area. Pape et al. note that:
"The current regional development policy process is
characterized by state and federal government commitment to establishing
regional agencies, who are given the task of developing--though not
implementing--strategies of social and economic change. This enables
governments to demonstrate a commitment to social and economic capacity
building at the regional level, even though empowered institutions of
regional governance are absent" (Pape et al., 2016: 917).
The 'power', autonomy and capacity to act of regional
entities mirrors earlier critiques of some RDOs (see, for example,
Wilkinson, 2003). In part, this can be explained by the complexity of
institutional environments within which state-sponsored RDOs operate and
the complexity of the fundamental task at hand. In the case of RDA
Committees, for example, Pugalis (2016) has recently referred to them as
part of a 'patchwork regional institutional architecture'.
According to some, such complexity negates against state-sponsored RDOs
developing programs and interacting with stakeholders in a predictable
manner (Patton, 2011). Instead, state-sponsored RDOs must contend with
many variables, competing objectives and timescales, ephemeral political
priorities, changing policies, interrelationships and evolving
socioeconomic landscapes (i.e. complex systems). This further
complicates regional development activities and, may, limit the capacity
of state-sponsored RDOs to navigate their role through the complex
systems of regional economic development.
Operational complexity, on the other hand, can be observed from the
role of the economic development practitioner. The twenty-first century
economic development practitioner is often expected to exhibit a wide
range of skills to help navigate multifaceted processes (e.g.
institutional, political, financial etc.), and to broker and facilitate
sustainable regional economic development. Consequently, practitioners
are expected to be dexterous, nimble and resourceful; influencers,
networkers, brokers and facilitators; marketeers, program managers and
project promoters; business savvy and versed in government processes and
community needs; ethical, transparent and accountable; knowledgeable (in
a codified and place-based sense); boundary-spanners, collaborators and
builders of trust; strategic and politically sensitive;
action-orientated and outcome-focussed; and understand what works, why
and where, as well as what does not (Colitts, 2008). The onus is,
therefore, on economic development practitioners through institutions,
such as RDOs, to be agile, flexible and responsive to multifarious
changes; expressed through the notion 'fleet-of-foot' (Pugalis
and Townsend, 2013). Making sense of and 'managing' such
complexities is a major public service challenge, but is particularly
acute in the field of regional development which is multidisciplinary
and transcends any single policy domain (such as land use planning,
tourism or education).
In the following analysis, a basic complex systems framework has
been applied to the case study. Deploying this framework, we examine the
function and role of a specific RDO in a new way (Mitleton-Kelly, 2003),
rather than repeat or reinforce past critiques of these organisations.
Articulations of complex systems vary, although some key features
include: non-linearity, feedback, spontaneous order, robustness and lack
of central control, emergence, hierarchical organisations, and
numerosity (Ladyman et al., 2013). Firstly, regional systems emerge and
evolve in a non-linear manner as people move, factories close, houses
are built, and land uses change, for example. Secondly, there is
feedback within complex systems, such as the relationship between water
availability and crop production. Thirdly, spontaneous order emerges
within regional systems as change is absorbed by the many actors who
have adjusted their behaviour. Fourthly, regional systems are deemed to
be robust when they withstand change (e.g. floods or industry closure)
with limited central control. Fifthly, emergence of new states of
equilibrium and disorder engender further system changes. Sixthly, each
entity is organised hierarchically, with its own level of interaction
with the system and within the entity itself. Lastly, numerosity refers
multiple parts interacting in manifold ways.
Of interest to this study is the notion of complex adaptive
systems, which is a particular type of complex system. The complex
adaptive system is has been defined as "a collection of individual
agents with freedom to act in ways that are not always totally
predictable, and whose actions are interconnected so that one
agent's actions changes the context for other agents" (Plsek
and Greenhalgh, 2001: 625). Consequently, "the system is constantly
adapting to the conditions around it. Over time, the system evolves
through ceaseless adaptation" (Lewin and Regine, 2003: 168).
Similarly, Holland (1992) describes complex adaptive systems in terms of
an 'ensemble of many elements', which is the prerequisite
condition of interaction. Firstly, for systems to interact or
communicate with one another requires an exchange (i.e. energy, matter,
information etc.). Secondly, elements of the system require the means to
interact for a 'common cause'. The mediating mechanism can
include forces, collision or communication. Without interaction a system
merely forms a 'soup' of particles, which necessarily are
independent and have no means of forming patterns or establishing order.
Thirdly, disorder is a necessary condition for complexity as complex
systems are those whose order emerges from disorder. Fourthly, robust
order can be observed as whilst the above three conditions are all
necessary for a complex system to emerge, they are not sufficient.
Hence, a system consisting of many similar elements, which are
interacting in a disordered way has the potential of forming new orders,
patterns or structures that can persist. Lastly, a complex system
displays memory. Holland (1992) notes that it is "the persistence
of internal structure", which engenders memory.
In summary, these features of complex adaptive systems highlight
the paradox between policy order and complex practice. The existence of
complex systems poses a challenge to state-sponsored RDOs to develop an
advanced understanding and appreciation of their role vis-a-vis
governmental and socio-economic regional systems, which we illustrate
through the case of RDANI.
3. THE CASE OF RDANI
In NSW, 14 Regional Development Australia (RDA) Committees were
established by the Commonwealth and NSW Government, and they are
intended to be:
"strong advocates for their region and drivers of change and,
as such, have a pivotal role in fostering regional economic development.
The RDA network strengthens partnership across all three tiers of
government, regional business and the wider community to boost the
economic capability and performance of regions. RDA Committees are
active in promoting Australian Government and NSW Government programmes
and shepherding communities towards appropriate funding sources that
will assist projects that work towards economic development"
(Commonwealth of Australia, 2015b).
RDANI is a not-for-profit organisation, said to be 'community
based', which receives joint funding from the Australian and NSW
governments. It "is contracted by the Australian Government ... and
the New South Wales Government through the Department of Trade,
Industry, Regional Infrastructure and Services to act as a primary link
between government, business and the community in the Northern
region" (RDANI, 2016: 8). RDANI's 'core
responsibilities', laid out in a charter, include:
* Creating regional business growth plans and strategies which will
help support economic development, the creation of new jobs, skills
development and business investment.
* Identifying environmental solutions which will support ongoing
sustainability and the management of climate change.
* Identifying social inclusion strategies which will bring together
and support all members of the community.
Box 1. Regional Development Australia Committees
Committees are responsible for achieving five key Outcomes:
Outcome 1: Regional Plan
A current three to five-year plan that focusses on economic
development of their region. The plan must take into account
any relevant Commonwealth, state, territory and local government
plans.
Outcome 2: Critical issues
Advice to all levels of government on critical issues affecting
their region.
Outcome 3: Priority activities
Advice to governments on priority activities that will drive
regional economic development, on future economic opportunities
and on their region's comparative advantages, based on consultation
and engagement with community leaders.
Outcome 4: Project proposals
Assistance to local community stakeholders in order for them to
develop project proposals; and referral of stakeholders to
appropriate public and/or private funding sources--including the
$1 billion National Stronger Regions Fund.
Outcome 5: Promote Australian Government Programs
Increased awareness of Australian Government programs in their region.
Source: adapted from Commonwealth of Australia (2015b).
In this respect, RDANI emulates many state-sponsored RDOs in both
Australia and internationally that focus on business, environmental and
social activities (i.e. sustainable economic development). The regional
plan has the potential to perform an important function in this respect
as it is intended to "help focus governments and communities on
strengths, issues, and a work plan to achieve those priority regional
development goals" (Stewart in RDANI, 2016: 2). Moreover, RDANI
utilise "a regional economic development framework to promote
long-term regional economic growth and provide a practical focus for
strengthening our region" (RDANI, n.d.a). Complementing or perhaps
competing with RDANI's strategy is the draft New England North West
Regional Plan, which was recently issued by the NSW Government for
community consultation (NSW Department of Planning and Environment,
2016). This plan also constructs a vision and identifies goals and
actions for the region to achieve sustainable economic development
leading up to the year 2036. Furthermore, most local governments in this
region have economic development departments and staff to support
development initiatives, and have produced their own economic
development strategies (see, for example, Narrabri Shire Council n.d.,
and Tamworth Regional Council, n.d.), not to mention regional
organisations of councils and a plethora of other RDOs. The dense
networks of multiple and intersecting policies, strategies and bodies
serve to demonstrate the complexity of regional development
policymaking, which, arguably, mask under-resourcing and implementation
inertia.
RDANI functions in an environment with many elements, with varied
institutional and individual participants within a geographically
diverse region of NSW. The Northern Inland region of New South Wales is
located inland between the state capital cities of Sydney and Brisbane
(see Figure 1). This region has an estimated population of over 180 000
people, a gross regional product exceeding $AU10 billion, 66 233 local
jobs and key sectoral strengths in manufacturing and agriculture (RDANI,
n.d.b) (see Figure 2). The Northern Inland region is defined by three
distinct geographic areas, the New England Tablelands and gorge country,
the North West Slopes and the North West Plains, which includes the
following 12 local government areas: the new merged Armidale Regional
Council between Armidale and Guyra Councils (Armidale Council, n.d.),
Tamworth Regional, Liverpool Plains. Tenterfield, Glen Innes Severn,
Inverell, Moree Plains, Uralla, Gunnedah, Narrabri, Walcha and Gwydir.
RDANI has a mission "to ensure long-term sustainable growth
and development of the region by driving and contributing to initiatives
that will support economic development and jobs" (Stewart in RDANI,
2016: 2). It aims "to be the driver of business growth, new jobs,
skills development and business investment within the Northern Inland
region" and "to improve the economic, physical and social
conditions of communities across the region" (RDANI, n.d.a).
According to RDANI's website (ibid.), recent projects include:
Moree Plains Business Workshops, Northern Inland Regional Investment
Profile, Namoi Investment Prospectus, Northern Lights Project, 2016
Northern Inland Innovation Awards, and Northern Inland Business Energy
Assessment. The Committee includes a board of 'local people'
supported by 'a small team of dedicated staff. In terms of skills
sets, both members and officers are claimed to possess 'extensive
networks' transecting different sectors:
"Committee members are volunteers drawn from the region and
who bring leadership, skills and experiences from the community,
business, local government and not-for-profit organisations"
(RDANI, 2016: 8).
RDANI's Complex Operating Environment
According to Holland's (1992) conceptual framework, RDANI
operates within an ensemble of elements directly interacting with each
other and capable of communicating and exchanging matter, and creating
disorder and order (patterns or structures) as a result. To illustrate
this point, Figure 3 reproduces the Northern Inland innovation network,
which seeks to identify key stakeholders (AusIndustry, 2016). A total of
75 organisations and programs, excluding individual actors, are
identified as primary participants. This network is indicative of the
extent of this ensemble of elements, although one suspects that the
actually existing Northern Inland innovation network is much more dense,
diverse and dynamic.
Applying Holland's (1992) theoretical lens to the Northern
Inland innovation network, the basic elements of ensemble, interaction,
disorder and robust order, and memory can be observed. Each of the
elements has the capacity to directly interact and exchange with other
elements (although the connections between the actors has not been
identified), and each interaction is mediated through communication
channels (e.g. information technology) or physical connections (e.g.
events or infrastructure). For example, the University of New England
may connect to the NSW Department of Industry to create an incubator
program, which then creates new connections to other elements of the
ensemble. Once established, the incubator program will create disorder,
and then order will remerge as the elements self-organise to adapt to
the influence in this system. The persistence of the incubator program
within this system will then create a memory, which will inform elements
in the future.
4. POLICY ORDER AND COMPLEX PRACTICE: ANALYSING THE ROLE OF RDANI
Through this section we analyse the tensions that RDANI is
grappling with as it seeks to impose some semblance of order on the
complex practice of regional economic development. In doing so, we draw
upon this analysis and empirical insights to inform a broader discussion
concerning the efficacy of RDA Committees.
Informed by the conceptualisation of RDOs presented in section two,
our analysis of RDANI focussed on six policy-relevant perspectives
utilised to help navigate uncertainty, which compares and contrasts
methods that seek to engender policy order and those that seek to work
with complexity (see Table 1). We apply Holland's complexity
framework as new way of thinking about RDOs- exchange, mediating
mechanism, disorder, robust order and memory--to help explain complex
practice for RDANI.
The first perspective which pervades regional economic development
discourse is values. The principle of producing policy order tends to
favour narrowly conceived value-for-money-based assessments. An
implication is that those projects with readily identifiable economic or
financial outcomes are favoured, whereas projects that might exhibit
broader values, including the potential for wider disruption leading to
new periods of adjusted equilibrium, are often disregarded.
The first perspective which pervades regional economic development
discourse is values. The principle of producing policy order tends to
favour narrowly conceived value-for-money-based assessments. An
implication is that those projects with readily identifiable economic or
financial outcomes are favoured, whereas projects that might exhibit
broader values, including the potential for wider disruption leading to
new periods of adjusted equilibrium, are often disregarded.
Given RDANI's emphasis on being 'community based',
this might imply that social considerations will shape their
institutional values. However, we find in practice the rich layers of
public values are ordered and managed through formal processes, such as
formal consultation exercises, with economic or financial objectives and
measurements prioritised, although not always in an explicit manner.
This is consistent with neoliberal policy perspectives, where a narrower
articulation of regional economic development, preoccupied with
quantitative economic growth outputs, often comes to the fore. For
example, RDANI review their performance against a narrow set of key
performance indicators, or KPIs, which are a key instrument that emerged
from New Public Management thinking. In Holland's (1992)
terminology, exchange is focussed between economic actors, whereby the
primary mediating mechanism becomes economic growth. Yet, this narrow
approach to values misses the necessary features of creating disorder,
which after self-organisation leads to a new robust order. In other
words, a complex public values-based approach would embrace disorder by
departing from prior practice as part of the process of searching for
new states of robust order.
While value-for-money rationales are a common feature of regional
economic development practice and neoliberal policymaking, a sign of
encouragement is RDANI's attempt to achieve 'net
benefit'. For example, their Regional Freight Study
"identified the most worthy road upgrade projects ... utilising a
benefit-cost framework" where "[p]rojects were ranked in order
of net benefit, and the public versus private benefits of upgrades were
identified" (RDANI, 2016: 8). The work has been used to advance
road infrastructure projects in the region (e.g. the Mt Lindsey Highway,
Thunderbolts Way). This points to the possibility for RDA Committees to
develop their own values-based methods, which might depart from orthodox
economic approaches. However, reconciling such bottom-up values with a
top-down operational framework is likely to be a considerable challenge.
The second perspective--organisational form, governance and
accountabilities--highlights the tension between organisational
parameters (e.g. legal, policy, budgetary etc.) and the porosity of RDA
Committees, which are themselves ensembles of elements within a broader
complex system. RDANI seeks structure and order through, for example,
structured review processes and planning documentation, although these
were necessary requirements to satisfy government (RDANI, 2016: 7), in
terms of providing an appearance of managing risks and uncertainty.
RDANI embodies the principle of policy order in that it is an
Incorporated Association in operation under the Incorporated Association
ACT 2009 (NSW), where the organisation structure is predefined and where
Committee members are appointed by the relevant Minister in the
Commonwealth and State government, who also define the priorities and
roles of RDANI (Commonwealth of Australia, n.d). This bequeathed
structure imposes some limitations on RDANI, although achieving
compliance may not necessarily be at the expense of working with
complexity.
RDOs are nodes in partnership networks, yet RDANI does not have a
directly elected democratic mandate, like Commonwealth, State, and Local
government RDOs. Whilst some Committees include local elected members,
many do not. A board of members is selected to 'represent' the
views of diverse and often competing actors. Yet, it is not clear what
mediating mechanisms beyond the pursuit of economic growth are deployed
to attempt to reconcile the views of a multitude of actors from
different civic, economic and social spheres. Indeed, formal
consultation processes are ordered (and circumscribed) by institutional
norms, processes and procedures. An alternative perspective,
nevertheless, could challenge the relevance and efficacy of mediating
mechanisms. In practice, the co-option of local policy elites (whether
from public, private or voluntary sectors) is deployed as a favoured
mediating mechanism. However, there is scope for RDOs to search out and
interact with more diverse networks and actors. In such a circumstance,
new actors would complement and enrich the complex system, which might
in turn engender disorder and feedback, and subsequently new order.
The role and importance of geography in economic development is
crucial to framings of regional economic development. As the third
perspective, the policy order approach to defining operational
territories features prominently in the work of RDANI. For example, the
Regional Plan (intended in part to 'describe the region'),
states that "RDANI is confident of improving the economic wellbeing
of the more than 40 towns and surrounding districts in our region"
(Stewart cited in RDANI, 2016a: 2). However, the geography of many RDA
Committees bears little resemblance to functional regions, evidenced in
some areas by competing regional structures and networks (Pugalis,
2016). However, this in itself is not a necessary precondition of
working with complexity. In seeking to embrace and acknowledge disorder,
RDANI could look to radically reconstitute its bounded geographical
template. In a practical sense, this might include identifying and
engaging with how other places interact, complement and compete with one
another. Such networks, interactions and relationships might include
finance, education, trade and charities. This approach would necessitate
mediating mechanisms to facilitate disorder, feedback and new states of
order.
Perspective four is concerned with actors and institutional
relations. RDANI is positioned for policy order as the identified
primary institutional space for mobilising different partners,
capabilities and resources; performing "a pivotal role in fostering
regional economic development RDANI will take a leadership role in
bringing together organisations to take advantage of government
programs, policies and initiatives, and will be an effective conduit
between governments and regional communities" (RDANI, 2016: 8,
emphasis added). In Holland's (1992) terms, RDANI seeks to impose,
at least in a rhetorical sense, robust order on a complex system that
has already developed new states of robust order. The issue for RDANI is
that has been created from previous processes and interactions of
disorder, feedback, adjustment and order. As such, this creates a
constant tension between trying to impose an orderly and sequential
project and trying to adapt to new states of robust order while
maintaining the memory of RDANI's role in the past or previous
programs. In other words, as the broader socioeconomic landscape
evolves, there is a need for RDOs to adapt accordingly and not simply
regurgitate prior practice. However, the extent to which RDA Committees
are embedded within broader systems of government and governance is a
moot point. For example, whilst the "Regional Plan is a key
document for Regional Development Australia Northern Inland
(RDANI)" (RDANI, 2016: 9), it is less clear if the plan is a key
tool for the region. If this plan does not create exchange between the
local ensemble of actors, then disorder and new states of order are
unlikely to emerge. In this sense, the function of RDA Committees is
often akin to a delivery agent for the state (acting as a post office of
sorts or 'administrative post offices' in the words of a
reviewer), whereby attempts to mobilise distinctive regional cultures
and capabilities tend to be more circumscribed. The implication being
the need for RDOs to recognise complex systems and manage complex
relationships in new ways. If RDOs are operating as 'administrative
post offices', then this has formed as memory in the system.
In an attempt to engage a broader range of actors, during 2010/11
RDANI held 21 meetings with 'community' members as part of
'exploratory conversations' intended to identify key
strengths, assets, successes, challenges and opportunities. RDANI is
also "looking at ways of obtaining structured feedback on both
interaction and project activity during the course of each year"
(RDANI, 2016: 7). Yet, given the points noted above about its
organisational form and governance, which is similar to other RDA
Committees, we contend that RDANI is often a marginal voice in policy
decisions impacting regional economic development. In other words, it is
a recipient of policy dictates, which reacts to funding calls and other
'opportunities'. Yet, this does not need to be the case. For
example, RDA Committees might seek to utilise their memory to mediate
between elements of the system and foster change as order and disorder
within the system, particularly in terms of transforming
intergovernmental relationships.
The fifth perspective relates to planning, prioritisation and
projects. Interventions such as those with the aim of "attracting]
at least five new enterprises providing tangible employment
outcomes" (RDANI, 2016: 7), are somewhat divorced from the broader,
complex challenges that the region faces. Such a goal is emblematic of
trying to impose policy order rather than engage with societal
complexity. A key issue for state-sponsored RDOs is that they become too
focused on the needs of the provider of funds (Johnson et al., 2005),
which have their own priorities and award funds with strings attached.
Too often, 'chasing the funding' has become an end in itself
(Pugalis, 2016). The result can be a situation where spending funds
becomes a priority. It could therefore be argued that much practice is
ordered by the funding envelope, which is an issue of much broader
relevance beyond the case of RDANI and, even, Australia. The above
analysis suggests that the operation of RDA Committees is driven by
transactional relationships predominantly with government, which is
indicative of top-down regional policy and which tends to ignore the
day-to-day contemporary experiences of complex systems. Indeed, funding
alone is unlikely to engender new states of disorder.
The final perspective relates to temporal matters. The Regional
Plan claims to be 'comprehensive' as well as being a
'living document' that "presents a snapshot of Northern
Inland NSW" (RDANI, 2016: 9). Yet, there is little evidence to
suggest that it is a dynamic 'living' tool. As a published
plan, it is intended to be finalised (albeit recognising the need for
review). Indeed, the Regional Plan 2016-19 is a refreshed version of
Regional Plan 2013-16 and Regional Plan 2010-13. Hence, there is
sufficient memory (e.g. priorities, processes, implementation and
lessons), which at present appears to be underutilised, and it is not
clear how this regional plan embodies the diverse values, resources and
capabilities of RDANI's ensemble of competing actors, and it is
even less clear how these tensions might be reconciled or engaged in
order to enhance outcomes. The principle of a living strategy document,
nevertheless, offers substantial potential, and could for example result
in new forms of engagement with diverse actors in the system, which in
turn might create enough influence over the local complex system to
initiate the emergence of new memory in the system. Admittedly, given
that the current funding models available to RDANI often reflect the
short-term nature of the policy cycle and the international move towards
performance-based contracts, projects are unlikely to embrace all
elements in the system, disrupt and engender new equilibriums.
5. CONCLUSION
Both government systems and regional socio-economic systems have
been perpetually transforming and, these changes appear to have been
accelerating over recent times. Observing a regional economic
development paradox, where state-sponsored RDOs, such as RDA Committees,
attempt to instil policy order in the face of societal complexity and
complex practice, this paper has introduced complex systems as a frame
to analyse the working methods of RDOs, by drawing on the case of RDANI
in NSW. In seeking to inform contemporary debates concerning the
efficacy of RDA Committees, which are in the midst of an independent
review at the time of writing, we conclude, with some broader points
derived from our findings, that regional economic strategies are
preoccupied with providing the appearance of policy order and reflect a
bias towards structured processes and transactional relationships, which
eschew practical complexities. We have put forward an alternative way of
understanding the operation of state-sponsored RDOs; considering their
design, objectives, activities and potential for change.
At least four reasons can be put forward to help explain why there
is a bias towards formalisation and simplicity as part of an attempt to
impose or, at least, give the appearance of policy order in the face of
complexity. The first reason is what Rubin (1988) has referred to as the
"search for administrative certainty and task closure". This
approach appears to override the capacity of the organisation to embrace
complex practice, whereby interactions with other actors involve
exchange and order and disorder, which may occur differently across time
and space.
The second reason is that practitioners tend to favour systems and
identifiable outputs to overcome a perceived lack of management and
stakeholder understanding of their roles (Rubin, 1988). In the case of
RDANI, this is apparent through the focus on tightly framed KPIs and
quantifiable outputs that are divorced from addressing some of the most
fundamental regional economic development challenges, such as industrial
diversification and resource efficiency (RDANI, 2016), which transcend
narrowly conceived, time-limited programs. This defensive, albeit
pragmatic, approach limits an organisation's engagement with
complex systems, and perpetuates traditional working methods and
orthodox practice as it hinders the creation of new memory in the
system.
The third reason is that RDOs avoid undertaking activities that
seek to grapple with societal complexity, such as radical and/or high
risk experiments for fear of failure (Ackoff, 2006). Stepping beyond the
relative safety provided by the appearance of policy order and into
complex and unknown realms heightens the chance of bureaucratic failure
(i.e. targets not met).
The fourth reason relates to a lack of knowledge and understanding
of complexity and, thus, limits its application (Ackoff, 2006). For
example, complex systems are multifaceted, complicated and convoluted.
This can be bewildering for actors to comprehend, and also makes for
complicated communication with the general population. Consequently,
there is a preference to stick with the status quo, whereby orthodox
practice prevails. Taken together, these reasons constitute tactics
deployed by state-sponsored RDOs that seek to help to minimise mistakes
arising from their operations, which is an 'act of
commission'. Embracing complexity would require a more radical
shift in practice, which could result in an 'act of omission'.
Therefore the default position is to maintain current operations and
seek to minimise 'risks' (particularly reputational risks).
Some RDOs, similar to RDA Committees, are at risk of being
stuck-in-the-middle of two evolving complex systems. On the one hand,
governmental systems are being recast, which is altering the role of
government, including the scope and delivery of services. On the other
hand, the complexity of regional socio-economic systems continues to
swell. It could be argued that the impact and performance of many RDA
Committees is restricted by their design--they are often creatures of
the state that lack democratic legitimacy, statutory powers, special
purpose policy tools and goal independence (Pugalis, 2016). Compliance
is rewarded over creativity. Crude output frameworks, measures of
'success' and KPIs insufficiently reflect transformational
changes and encourage regional actors to game the system--adopting and
striving for the appearance of policy order. Indeed, RDA Committees lack
sufficient autonomy and credibility, as they have struggled to engender
robust order. The implication is that many state-sponsored RDOs face the
challenge of becoming more 'user-centred' rather than
'government choosing', whereby the 'benefactor'
becomes an 'enabler'.
Notwithstanding the variegated nature and performance of specific
RDA Committees, it is argued that the overall RDA program is tangential
to local, regional and national development activities and ambitions.
The national network of RDA Committees, for example, is largely divorced
from other Australian Government policies (and public sector
policies/services more generally) that are central to stimulating growth
and development. Moreover, the influence of RDA Committees in shaping,
stimulating and developing local economies is incidental, at best. As a
result, RDA Committees are ill-equipped to provide a 'mediating
mechanism' as they jostle for position alongside other bodies in
"a complex and fragmented set of institutional arrangements for
regional governance, intervention and decision-making processes"
(Pape et al., 2016: 913). Indeed, RDA Committees often compete with
rather than cooperate with other regional structures, such as, Regional
Organisations of Councils and/or other state-sponsored RDOs as is the
case in parts of Victoria. This can diminish leadership capacity, and
can result in the duplication of activities. There is a major risk that
some RDA Committees are peripheral actors in the 'ensemble of many
elements' contributing to regional economic development.
Alternatively, the RDA program could be repurposed as a key vehicle to
help improve intergovernmental relations, encourage joint-working, and
support local initiative and creativity (Pugalis, 2016). Yet, for this
to be realised creativity would need to be on a par with compliance.
One perspective suggests that if RDA Committees are unable to help
regions navigate the complexity of governmental and regional
socioeconomic systems then they are likely to face an existential
crisis. An alternative perspective suggests that the RDA
Committee--including its antecedents--persists because of
'memory' in the complex system; changes have been absorbed and
the elements have created a new equilibrium, which is what we observe of
RDA Committees in late 2016. The robustness of the regional development
committee despite the disorder created by periods of popularity and
unpopularity, existence and non-existence, suggests a memory or pattern
has been created that maintains this organisational form.
RDA Committees and similar state-sponsored RDOs can therefore
choose to tread one of at least two paths: adapt and survive, or
continue with business-as-usual and risk fatal demise. A greater
appreciation of complex systems may be a pragmatic step as part of the
evolution of state-sponsored regional economic development. After
acknowledging the importance of complex systems, regional organisations
can then begin to consider their role in such a system. Subsequently,
interactions can be prioritised that engender adaptive responses,
thereby disrupting order and orthodox practice. Whilst such a cultural
shift (emphasising freedom to act) may be challenging, it might be a
fruitful way of effecting regional performance and development in a
context of financial restraints. One of the key learnings from complex
adaptive systems theory is that actions, whilst not necessarily
predictable, are interconnected in ways that "changes the context
for other agents" (Plsek and Greenhalgh, 2001: 625) through a
perpetual state of adaptation.
ACKNOWLEDGEMENTS: This paper is a revised version of a paper
presented at the ANZRSAI Conference 2016 and subsequently published in
the conference proceedings under the title--The regional economic
development paradox: policy order and complex practice. We acknowledge
the insightful comments and suggestions provided by Tony Sorensen,
although the usual disclaimers apply and the views expressed in this
paper are those of the individual authors and do not necessarily reflect
the views of their respective institutions.
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Lee Pugalis
Professor of Urban Studies, Institute for Public Policy and
Governance, University of Technology Sydney, Ultimo, NSW,
2007, Australia.
Email: lee.pugalis@uts.edu.au
Darren Keegan
Independent practitioner-researcher
Caption: Figure 1. Location of RDANI and Local Government
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Caption: Figure 2. Structure of the Northern Inland Economy.
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Caption: Figure 3. Northern Inland Innovation Network. Source:
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Table 1. Policy Order and Complexity: Summary of Analysis.
The appearance of
Perspectives policy order Working with complexity
Values Narrow value-for-money Broad, evolving and
assessments typically dynamic public values
confined to specific reflecting qualitative
programs and projects as well as
cloaked in broader quantitative metrics
public value discourse
Organisational A formal and planning- A dynamic and
form, governance based not-for-profit unbounded
and organisation operating organisational
accountabilities within certain legal network, multi-actor
parameters, a involvement and
governance board and governance, and
accountabilities in multiple
terms of performance accountabilities to
management different constituents
Geography A defined territory Multiple, overlapping
based on composite and dynamic
local government functional'
administrative areas geographies working
with geographical
complexity
Actors and Hierarchical An ensemble of often
institutional reporting relationship competing actors with
relations with formal tiers of diverse objectives
government and formal that mutually self-
consultation with adjust
'other' stakeholders
Planning, Formalised, scheduled Entrepreneurial,
prioritisation and transactional: flexible and
and projects given shape 'from relational interactions
above' by national from multiple
and state policies directions and
and 'from below' by dimensions
local government
policies
Temporal Funding parameters Porous and emergent
conditions delivery visions and strategies
timescales, which to deliver a mix of
tend to be short-term long-term and short-
--reflecting political term projects
budgetary cycles
Source: Authors' analysis
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