The “Trilemma” of Public Bodies: Bureaucratic Structures Versus Agencies Under Policy Conditionality

DOI10.1177/0095399720902798
Date01 October 2020
AuthorGiorgio Oikonomou,Manto Lampropoulou
Published date01 October 2020
Subject MatterArticles
/tmp/tmp-18QNvnfcmLtMjn/input 902798AASXXX10.1177/0095399720902798Administration & SocietyLampropoulou and Oikonomou
research-article2020
Article
Administration & Society
2020, Vol. 52(9) 1299 –1332
The “Trilemma”
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Bureaucratic Structures
Versus Agencies Under
Policy Conditionality
Manto Lampropoulou1
and Giorgio Oikonomou2
Abstract
The aim of this article is to explore the implications of the delegation of
powers from central bureaucracies to semi-autonomous agencies for
public administration under policy conditionality. Focusing on Greece,
we argue that agencification reforms that were introduced during the
economic adjustment programs (2010–2018) have changed the role of the
administrative apparatus in policy-making and implementation. Based on two
exemplary case studies, tax administration and state assets management, the
empirical findings illustrate the political dynamics that induced organizational
transformation and show how policy conditionality has changed the domestic
agencification pattern and has rebalanced the institutional, functional, and
democratic dimensions of agencies.
Keywords
public administration, organizational reform, agencification, policy conditionality,
Greece
1National and Kapodistrian University of Athens, Greece
2University of the Peloponnese, Corinth, Greece
Corresponding Author:
Giorgio Oikonomou, Department of Political Science and International Relations, School
of Social and Political Sciences, University of the Peloponnese, 1 Aristotelous St. & Athinon
Avenue, GR-201 32 Corinth, Greece.
Email: giorgio.oikonomou@yahoo.com

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Administration & Society 52(9)
Introduction
The Eurozone crisis as well as the prior global economic and fiscal ones
(Kickert, 2012) have unquestioningly affected the organizational patterns of
public administration. Especially in countries that were severely hit by the
crisis, such as Greece, the financial assistance programs set out a wide range
of measures that should be implemented within a very tight timeline. In
Greece, the debt crisis erupted in late 2009 and led to three successive pro-
grams of sweeping reforms, the so-called Memoranda of Understanding
(MoUs, 2010–2018). The volume and the type of the required adjustments
coupled with the short implementation frame placed enormous pressure on
the administrative apparatus that was not used to rapid and radical reforms.
Instead, the domestic administrative system has been characterized by long-
standing resistance to change, cumbersome procedures, slow adjustment,
(over)politicization, and low reform capacity (Featherstone, 2005, 2015;
Ladi, 2014; Lampropoulou & Oikonomou, 2018; Spanou, 1998, 2001;
Spanou & Sotiropoulos, 2011). The need for quick and large-scale adjust-
ments called into question the capability of existing structures to effectively
respond to the new policy formulation, implementation, and monitoring
requirements. At the same time, the external involvement in domestic politics
and the direct linkage of the reforms with the loans disbursement created a
new policy environment defined by the conditionality clause that accompa-
nied the bailout agreements (Featherstone, 2015; Spanou, 2018).
In light of these pressures and in search of more flexibility, credibility and
effectiveness of public administration, critical functions and responsibilities
were delegated from central bureaucratic structures to quasi-independent
entities, which were placed at a distance from the ministerial bureaucracy.
The nature of these agencies shows a clear tendency toward the strengthening
of “arm’s length” bodies that are not subject to direct political and democratic
control. The agencification trend was evidently stronger in reform areas that
were linked with the economic adjustment programs and had a strong fiscal
impact, such as tax collection and privatizations. In these areas, the crisis has
changed the motives and the criteria for agency creation as well as their gov-
ernance methods.
This article aims at investigating the implications of the aforementioned
developments for the domestic administrative system. To that purpose, we
delve into the agencification effects through the lens of policy conditionality,
exploring its impact on the relationship between traditional bureaucratic
structures and quasi-autonomous bodies. In our analytical scheme, we use as
a dependent variable the structural transformations of public bodies in two
policy fields that are highly contingent upon external conditionality, namely

Lampropoulou and Oikonomou
1301
tax administration and state assets management. The external pressure for
reforms has been the catalyst for a range of institutional adjustments and
constitutes the independent variable. Policy conditionality serves as an inter-
mediate variable, largely explaining the type and the scale of change in times
of crisis, as well as certain particularities of the Greek case.
Our starting point is that the shift from traditional bureaucratic structures
to semi-autonomous agencies has increased the complexity of policy-making
and implementation and caused certain trade-offs between the goals and prin-
ciples that the newly established agencies pursue. The complexity of policy-
making is reflected on several variables of the political-administrative system
in relation to the agencification trend in the crisis context: the multilevel pro-
cess of decision-making and the involved (domestic and supranational)
actors, the multiplication of structures involved in policy-making and imple-
mentation, the subsequent “inflation” and overlapping of administrative pro-
cedures and functions, the new coordination requirements between and
within the national and supranational institutions, the domestic government
and the decentralized agencies, the shift of control and accountability stan-
dards, and the (re)hierarchization of the political and the technical-manage-
rial features of public organizations.
It is argued that these new arrangements created considerable tension
within public agencies with regard to three critical dimensions: (a) the insti-
tutional
(political autonomy), (b) the functional (technical effectiveness), and
(c) the democratic (accountability). The relationship among these dimen-
sions constitutes a critical “trilemma” in the process of the structural reform
of public administration via agencification. This argument is linked with the
nexus between the political and the administrative sphere, suggesting that the
rebalancing of the aforementioned dimensions reflects a broader shift in the
perception of the politics-administration dichotomy in Greece, which has
been accentuated during the crisis.
The article aspires to contribute to the theoretical debate concerning agen-
cification and administrative reform under policy conditionality. At an empir-
ical level, we focus on the newly established agencies in the areas of tax
administration and state assets management, respectively the Independent
Authority for Public Revenues (IAPR) and the Hellenic Corporation of
Assets and Participations (HCAP). The creation of these agencies was
required by the Memoranda that were agreed between the Greek government
and the “Troika”/“Institutions.”1 The fiscal constraints and the pressure for
delivering large-scale reforms within a very short timeframe provided the
core rationale for the delegation of competencies that were traditionally exer-
cised by ministerial departments to quasi-independent agencies. Along with
the economic and technical arguments, this delegation of powers to arm’s

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Administration & Society 52(9)
length bodies aimed at the depoliticization of the administrative apparatus. In
this respect, the subsequent organizational adjustments have sharpened the
divide between the political and the administrative sphere.
Based on the “trilemma” proposition, the implications of the shift from
bureaucratic structures to autonomous agencies are assessed with reference
to three analytical criteria: (a) the institutional features of IAPR and HCAP
and the governance, decision-making, and policy implementation tools; (b)
the agencies’ function and performance; and (c) the democratic legitimacy
and accountability framework. Greece represents an exemplary case study
because the manifested agencification trend has been differentiated from
similar reforms in other European Union (EU) countries principally due to
the conditionality that linked the reforms with the loans’ disbursement. Policy
conditionality has created a unique type of agencies that are characterized by
multilevel and multistakeholder accountability. The criteria of agency cre-
ation, governance, and performance have changed as well, shifting the
emphasis from the political to the technical and economic dimensions.
Overall, agencification during the economic adjustment programs seems to
have acquired new and exceptional characteristics that differentiate the post-
crisis agencies not only from the pre-crisis ones at the domestic level, but also
from the typical New Public Management (NPM)-inspired agency model.
Based on the above claims, two main hypotheses are formed and will be
tested in the analysis that follows: (a) the sharper separation between politics
and administration and (b) the changing character of the domestic pattern of
...

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