STRATEGIC PLANNING IN U.S. MUNICIPALITIES.

• Author: Ravensway, James Van

1. Introduction

   The public sector throughout the world has been engaged in reform efforts for more than three decades. These efforts have been wide-ranging in both purpose and process. Major purposes of reform have been to make government more efficient, effective and responsive. Rightly or wrongly, efficiency has been a concern because many have seen government as inefficient. Perceived reasons for this have been unmotivated public employees, high cost procurement processes and general corruption.

   Government has been seen as not effective enough not just because of efficiency concerns in the narrow sense of output per unit, but also because of lack of direction, strong leadership and suppression of innovation. Responsiveness issues have resulted from citizens concerns about the lack of bottom up connection between citizen desires for public services and public motivation to respond. In short, even in representative democracies, the connection between political demands and bureaucratic response has been perceived to be slow and weak.

   Others have pointed out that corporations, particularly those with oligopolistic positions, can also become inefficient, unresponsive, short-term oriented, and corrupt. Whether or not and to what extent the perceptions of government versus the private sector are correct, one thread that has run through the public administration reform movement is that governments should act more like private companies, responding to market demand and competing to find the most efficient and effective methods.

   In the 1980's a strong movement in the U.S. focused on reforming governments in a variety of ways that injected market forces and private sector expertise into the governmental process. Some of the efforts included: the application of public-choice economic theory (Tollison, 1984), private procurement of public services (Boyne, 1998), and public-private partnerships (Leuca, Hamlin, and Van Ravensway, 2011). The era of Regan, Nakasone and Thatcher witnessed the push for the privatization of government on three continents (Hamlin and Lyons, 1996). The 1993 book Reinventing Government, started a movement by offering a set of specific examples of how market forces could be injected into public policy without changing government's basic structure or mission (Osborne and Gaebler, 1993).

   This thrust, which is still alive, today, has been successful in changing the dialogue about how to reform government. Even when pro-market efforts to reinvent government have failed, they have highlighted new areas of concern about governance. How do we answer the following questions with respect to each of the goods or services demanded by society: 1) Who should produce those goods or services?; 2) How much should be produced?; 3) Who pays?; 4) What price?; 5) Who benefits?; 6) What level of quality should be demanded?; 7) What underlying infrastructure should support production?

   For each of the questions above, we also have to decide: 1) Who determines the answer to the (above) questions?; 2) On what criteria are the answers are based?; 3) Who are these decision-makers accountable to (or who is accountable to whom)? (Buchanan and Tollison, 1984).

   Planned economies try to make all of these decisions based on rational analysis through centralized decision making. Yet, all attempts at planned economies are overwhelmed with the magnitude and speed with which all of these decisions have to be made. And, rational analysis seldom escapes various forms of bias. Market forces always creep back into the system, either intentionally, or through black markets.

   Pure market economies try to rely on market forces to make all decisions, but are always overwhelmed with the high level of externalities present in nearly every action. Very few markets for goods and services can be said to flawlessly exhibit Adam Smith's pure-competition invisible hand.

   One way to look at public administration reform is to seek the right balance between technocratic planning and management and the injection of market forces, while maintaining governments' ability to set goals that lead to the achievement of a public purpose and the public interest. A part of this thrust has been to look to the business world for tools that would help find that balance. One of the tools coming out of the world of business that has been adapted and adopted by the public sector is strategic planning.

   The purpose of this paper is to describe briefly the history, process and future of strategic planning in local governments in the US, a story that is somewhat different than that in Europe. The first section looks briefly at the historic roots of strategic planning in the U.S., how that history might be different from that in Europe. The second section describes how strategic planning is typically done in the U.S., with the third section providing a case study. Then some conclusions are drawn.

2. Background: A brief history of strategic planning in the U.S.

   Strategic management is more than 2 millennia old and has military origins. The word 'strategy' may come from the Greek word 'strategos', 'general of the army'. In the modern context, strategic planning may have come from the Harvard Policy Model developed by the Harvard Business School in the 1920's. The Harvard Policy Model is often considered one of the first strategic planning methodologies for private businesses. The model defined 'strategy' as a pattern of purposes and policies that acts as a common thread or underlying logic that holding a business together. Strategy weaves a pattern that unites company resources, senior management, and market information. This sort of comprehensive, embodiment approach was lost for a while. In the 1950's, the strategic planning's focus shifted away from organizational policy and structure toward a better way to organize day-to-day management. The focus was on how to ride herd on things like shifting markets and competitive threats that lead to risks and opportunities. This kind of strategic planning became a common and accepted management tool in nearly all Fortune 500 companies, as well as many smaller companies (Blackerby, undated).

   Through the 1970's, strategic planning was mainly found in corporations. The primary private sector strategic concerns such as market share, customer service, advertising, industry growth, and risk management were not salient to local governments. Federal and state bureaucracies focused on program planning. The result was often an emphasis on internal concerns or program inputs such as taxes, fees, funding, staffing levels, waste, and fraud. Eventually, those saying to run government more like a business and get more 'bang for the buck', changed the focus from inputs to outputs (Blackerby, undated).

   Former Ford Motor Corporation Wiz Kid and President, and, later, U.S. Defense Secretary Robert S. McNamara advocated scientific management. He promoted the above-mentioned trend in strategic planning by connecting planning activities to the budget through program budgeting, and ultimately the planning, programming, budgeting system (PPBS). Other private sector initiatives considered for adoption by the public sector were zero-based budgeting, reengineering, total quality management (TQM), and continuous quality improvement (CQI). At the time, this author heard a Ford executive voice a familiar refrain: 'The private sector has been working hard to reestablish competitiveness in a rapidly changing world. It is about time that the public sector (in the U.S.) did the same'.

   At the local government level in the U.S. the word 'planning' tended to refer to urban planning.

   Paradoxically, one of the peculiarities of local public management in the U.S. has to do with the nature and history of the urban planning profession. This aspect has not always been reflected in the U.S. public administration literature because the public administration professional organization and the urban planning professional organization seldom communicate and cooperate.

   Urban planning in Europe has had deep roots in the design professions of architecture and landscape. One can argue that this goes back centuries. The result has been that city planning usually focused on design and the physical aspects of urban structure such as the location of streets and buildings, street design and streetscapes. This tradition carried over into Latin America and Asia is still salient today, although changing.

   The same tradition was initially prevalent in the U.S. Things like the L. Enfant plan for Washington, D.C (1791), the Commissioner's grid iron street plan for New York City (1811) and the Columbia Exposition in Chicago (1893) were evidence of that design orientation (Campbell, 2015). Yet, these were long before the formalization of a planning profession and professional organization. A transition took place at an earlier stage of the U.S. planning profession toward the concept of comprehensiveness than in Europe. A comprehensive plan looks at the long-term and interconnected implications of nearly all facets of local government.

   So, the different path of the US urban planning profession is, perhaps, because it had a different kind of origin...