The ‘Institutional Layer’ of Intergovernmental Management

An initial empirical puzzle is the extent to which intergovernmental manage­ment is simply shaped and constrained by the formal and informal structures of federalism. I tested this issue by looking at the abolition in 2013 of a num­ber of ministerial councils that supported coag, comparing the practice of intergovernmental management in the absence or continued existence of the council.

On the one hand, a perceived effect of losing official council status is the loss of ‘gravitas' it entails, meaning ‘profile and clout and the level of seniority and resourcing that goes along with the need to service a ministerial committee', resulting in a shift from a structured agenda and process to ‘working politely across jurisdictional boundaries on things that are largely of a non-threatening nature' (interviewee: state line department). Specific policy areas interviewees nominated that had been affected by this loss of momentum included the list­ing processes for threatened species, the development of model occupational health and safety legislation, and housing policy.^[48]

However, other officials (across the commonwealth-state divide) felt that the abolition had changed little in practice in their policy fields. The formal abolition of the council was followed by its effective continuation as those ministers continued to meet, dealing with policies on agriculture and the envi­ronment, children, families and housing (Phillimore and Fenna 2017, p.

Individual agency comes to the fore in this environment; officials deter­mined there was a need to replace the formal councils with other structures and took steps to do so. This is a particular example of what Jabko and Sheingate (2018, p. 13) refer to as ‘order preserving innovations’ where agency is exercised to maintain structures. In the environmental policy area, for example, inter­viewees described how they personally set up networks operating at all lev­els, both senior—such as between the heads of the Environment Protection Authorities—and among mid-level regulators and technical specialists—such as the contaminated environments network. Officials may also exercise such agency when the structure is in place, but does not provide sufficient support for what they perceive as a priority, such as the push by officials to elevate a low-key network monitoring Indigenous sexual health into a group with min­isterial and senior officials’ representation. Exercising agency to change or restore formal structures requires vision and commitment; it is a very partic­ular form of agency, where substantial personal resources and organisational capital will have to be harnessed to restore the damaged institution.

I also examined the negotiation of formal intergovernmental agreements in order to test how intergovernmental management is affected by and impacts on the formal and informal structures of federalism. Formal intergovernmen­tal agreements set out objectives, outcomes, outputs and performance indi­cators, particularly for the transmission of funds between federal and state governments.

Two counter-narratives are broadly discernible in the interviews, or two normative frameworks that govern negotiations. One is based on adversarial conflict and distrust, reflecting a rational-choice type of calculus in seeking and achieving political and fiscal benefits; interests are perceived to trump principles. Many interviewees felt that individual states were making side deals with the commonwealth. Commonwealth officials contend that the states typically ‘cheat’ by cost-shifting and failing to deliver on the terms of the transfer of federal money. State government officials, drawing on the tropes of coordinate federalism, emphasize the states’ drive for independence, within the constraints of fiscal federalism.

However, a strong counter-narrative contends that negotiations are a more complex phenomenon than simply an alignment behind opposing sets of inter­ests. Although central agencies tended to take a broader view that included systemic and national objectives, this was not always the case: many inter­viewees from line departments articulated views that reflected this broader perspective:

If we do a cunning funding deal with the commonwealth but at the end of the day the commonwealth ends up with a budget problem because health expenditure blows out and they can't afford it, I'm not going to have a cunning funding deal for long. So we have to get a national interest outcome because if we don't get a national interest outcome the brilliant deal we've got on paper will not be sustainable. (Interviewee: state cen­tral department)

Such views inform policy brokering, exercised in problem-solving, mediation and finding a way to resolve sticking points, and frequently described as a search for national or systemic outcomes as distinct from narrower organizational or jurisdictional interests.

Officials tended to describe their agency to broker policy as bounded, first, by formal rules (or ‘rules-in-form' to use the institutionalist terminology), such as those requiring clarity in agreements on when payments can be made to a state, in order to avoid a breach of the constitutional clause governing appro­priations. Second, agency is bounded by mandate, bestowed normatively by the policy outcomes being sought on behalf of the political executive, and/or more generally by the policy settings established by their jurisdiction's polit­ical executive, central agencies or ‘running instructions' set by senior execu­tives in their organization.

For example, officials in one jurisdiction involved in negotiating the health funding agreement agreed at the April 2016 coag meeting decided to depart from the stance taken by other jurisdictions in seeking a restoration of previ­ous levels of funding.

We took the approach of saying, ‘Okay, we're going to go with a principles- based approach acknowledging that the commonwealth's fiscal position is not what it was previously. Therefore, there's going to have to be a bit of give and take.' Basically, we got the authority to go out and be an honest broker. (Interviewee: state central department)

In this example, there is a political mandate from the premier to adopt this position; a jurisdictional mandate, via the longstanding tradition in this juris­diction of working cooperatively with the commonwealth on national reforms; and an organizational mandate, based on the expertise this official had devel­oped that allowed senior officers to be ‘comfortable for me to play quite a front seat role on that’. Finally, there was a policy-specific strategy: this approach did not apply in other policy areas, such as in education, for example, where a more adversarial stance was adopted.

Once these boundaries are set, it becomes possible for more junior officers to exercise discretion on matters such as performance measurement and pay­ment design. Indeed, a degree of autonomy is built into the negotiation pro­cess to avoid the need to constantly seek approval for minor points. However, brokerage is not without its risks. Politicians may hold their own officials responsible if they feel their interests, political or jurisdictional, have been undermined.

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