Dr Simon Bastow

Prof Gwyn Bevan

This course is available on the CEMS Exchange, Double Master of Public Administration (LSE-Columbia), Double Master of Public Administration (LSE-Sciences Po), Double Master of Public Administration (LSE-University of Toronto), Global MSc in Management, Global MSc in Management (CEMS MIM), Global MSc in Management (MBA Exchange), Master of Public Administration, Master of Public Policy, MBA Exchange, MPA Dual Degree (LSE and Hertie), MPA Dual Degree (LSE and NUS), MPA Dual Degree (LSE and Tokyo), MPA in Data Science for Public Policy and MSc in Social Innovation and Entrepreneurship. This course is available with permission as an outside option to students on other programmes where regulations permit. This course uses controlled access as part of the course selection process. For information on controlled access courses, including eligibility, application processes, deadlines, and departmental contact details, please refer to the Controlled Access Courses webpage.

Priority given to School of Public Policy students, then to MSc Social Innovation & Entrepreneurship students. Students from outside of the School of Public Policy should submit a statement in support of their request.

Deadline for application: 9am on the Monday of Autumn Term week 1 (including requests from School of Public Policy students). We aim to inform students of the outcome of their request by 12noon the following day, Tuesday of Autumn Term week 1.

For queries contact: mpp@lse.ac.uk

The course examines innovations in different models of governance (defined broadly as the overarching mechanisms) that organise the delivery of public services.  We look at variations across three key governance models in particular, ‘hierarchy, markets and networks’ in recent decades, and assess their strengths and limitations.  We examine their application in both developed and developing countries, to a wide range of core public services, including healthcare, education, criminal justice, transport, public utilities, urban regeneration, reducing carbon emissions to ‘net-zero’, and others.

Many public services have seen a broad global shift from traditional hierarchical bureaucracies towards markets and networks.  Many countries have experienced, and will continue to experience, extensive marketisation of public services and we cover key innovations and their impacts. Markets, particularly privatisation, create high-powered incentives to challenge inertia that can beset the public sector. However marketisation is no panacea. Indeed, the characteristics of some public services mean that this brings new risks and problems. Governments have often struggled in recent decades with managing the consequences of market failures.  We look at the use of market mechanisms, including 'quasi-markets', voucher systems, full-scale privatisations, Private Finance Initiatives (PFIs) and Public-Private Partnerships (PPPs), Payment by Results (PBR) and Social Impact Bonds (SIBs), ‘blended’ models, and assess their impact on public services.  We also look at innovations in networked, polycentric or collaborative forms of governance.

A central theme of the course is the relationship between institutions and innovative mechanisms for change.  Markets and networks offer a wide range of innovative mechanisms, but their success or failure is determined by the institutional context in which they are implemented.  History matters and outcomes are path dependent. Radical changes are possible in ‘windows of opportunity’. The course examines different models of governance. It considers issues around optimisation of design and integration of models. It examines the impact of institutional path dependence on the successes and failures of innovations.  We explore how to align new mechanisms for change with existing institutions.

The course draws on a range of disciplines and analytical approaches, including transaction cost economics, political science, and institutional economics. The lectures and seminars are organised to enable students to understand key theory/concepts through illustrative cases and discussion.  The seminars are organised around group-based presentations.

15 hours of seminars and 22 hours of lectures in the Winter Term.

Students will be expected to produce 1 piece of formative coursework in Winter Term - a 750-word essay plan in week 5.

Students will be directed to key texts throughout the term.  Course literature draws from public policy and governance, the economics of transaction costs and behavioural economics among other disciplines.  Some indicative readings throughout the course include:

• Bevan, G. (2023) How did Britain come to this? A century of systemic failures of governance. LSE Press.
• M Barber. (2015) How to run a government so that citizens benefit and taxpayers don't go crazy, Allen Lane.
• Hirschman, AO. (1970) Exit, voice, and loyalty: Responses to decline in firms, organizations, and states. London: Harvard University press.
• Le Grand, J. (2007) The Other Invisible Hand: Delivering Public Services Through Choice and Competition, Princeton University Press.
• Williamson, OE (1975) Markets and Hierarchies, The Free Press.
• Williamson, OE (1985) The Economic Institutions of Capitalism: Firms, Markets and Relational Contracting, New York, The Free Press.
• North, D. (1990) Institutions, Institutional Change, and Economic Performance. Cambridge, Cambridge University Press.
• Akerlof, G.A. & Kranton, R.E. (2010) Identity Economics: How Identities Shape Our Work, Wages, and Well Being. Woodstock: Princeton University Press.
• Oliver, A (ed.) (2013) Behavioural Public Policy, Cambridge: Cambridge University Press.
• Katz, B. & J. Bradley (2013), The Metropolitan Revolution: How Cities and Metros are Fixing our Broken Politics and Fragile Economy (Brookings Institution Press).
• Bowles, S. (2016) The Moral Economy: Why Good Incentives Are No Substitute for Good Citizens. Yale University Press.

Presentation (25%).

This component of assessment includes an element of group work.

Presentation (25%).

This component of assessment includes an element of group work.

Essay (50%, 3000 words).

Presentations (one conceptual and one policy) as a member of an allocated group in two of the seminars (50% in total). Each presentation will require a 1-page memo submitted after the presentation (500 words). 

A research essay of 3,000 words critically examining governance and innovation in delivery of public services (50%).