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Article

Christoph Knill, Christina Steinbacher, and Yves Steinebach

Modern policymaking becomes an ever more complex and fragmented endeavor: Across countries, the pile of public policies is continuously growing. The risk of unintended interactions and ineffective policies increases. New and cross-cutting challenges strain the organizational setup of policymaking systems. Against this background, policy integration is assumed to present an antidote by improving the coherence, consistency, and coordination of public policies as well as of the processes that produce these policy outputs. Although various research attempts focus on policy integration, common concepts and theories are largely missing. The different facets of the phenomenon have only been covered disproportionally and empirical analyses remained fragmented. On these grounds, a more comprehensive and systematic view on policy integration is needed: To cope with complexity, governments are required to streamline and reconcile their products of policymaking (i.e., every single policy). Here, policymakers need to check for interactions with policies already adopted on the same level as well as with policies put in place by other levels of government (e.g., subnational). Moreover, policy integration also implies the creation and development of policymaking processes that systematically link political and administrative actors across various policy arenas, sectors, and levels. By elaborating on these process and product components of policy integration as well as on their horizontal and vertical manifestations, the different perspectives on policy integration are synthesized and embedded into a systematic framework. On the basis of this scheme of identifying four policy integration categories, it becomes clear that there are still loopholes in the literature. As these blind spots culminate in the absence of almost any concept on vertical policy process integration, a way of capturing the phenomenon is introduced through arguing that vertical policy process integration depends on the structural linkages between the policy formulation at the “top” and the implementation level at the “bottom.” More precisely, it is necessary to take account of the extent to which the policy producers have to carry the burden of implementation, and the degree to which the implementers can influence the policy design over the course of formulation. The proposed framework on policy integration is intended to serve as a guide for future research and to help to identify those aspects of policy integration in which further research efforts are required. Only in this way can policy integration as a theoretical and empirical concept be applied systematically across policy contexts—covering different countries, levels, and sectors— and serve as a stimulus for better policymaking.

Article

In the Federal Republic of Germany, with its parliamentary system of democratic governance, threats posed by natural hazards are of key national relevance. Storms cause the majority of damage and are the most frequent natural hazard, the greatest economic losses are related to floods, and extreme temperatures such as heatwaves cause the greatest number of fatalities. In 2002 a New Strategy for Protecting the Population in Germany was formulated. In this context, natural hazard governance structures and configurations comprise the entirety of actors, rules and regulations, agreements, processes, and mechanisms that deal with collecting, analyzing, communicating, and managing information related to natural hazards. The federal structure of crisis and disaster management shapes how responsible authorities coordinate and cooperate in the case of a disaster due to natural hazards. It features a vertical structure based on subsidiarity and relies heavily on volunteer work. As a state responsibility, the aversion of threats due to natural hazards encompasses planning and preparedness and the response to disaster. The states have legislative power to create related civil protection policies. The institutional and organizational frameworks and measures for disaster response can, therefore, differ between states. The coordination of state ministries takes place by activating an inter-ministerial crisis task force. District administrators or mayors bear the political responsibility for disaster management and lead local efforts that can include recovery and reconstruction measures. The operationalization of disaster management efforts on local levels follows the principle of subsidiarity, and state laws are implemented by local authorities. Based on this structure and the related institutions and responsibilities, actors from different tiers of government interact in the case of a natural hazard incident, in particular if state or local levels of government are overwhelmed: • states can request assistance from the federal government and its institutions; • states can request assistance from the police forces and authorities of other states; and • if the impact of a disaster exceeds local capacities, the next higher administrative level takes on the coordinating role. Due to the complexity of this federated governance system, the vertical integration of governance structures is important to ensure the effective response to and management of a natural hazard incident. Crisis and disaster management across state borders merges the coordination and communication structures on the federal and state levels into an inter-state crisis management structure. Within this governance structure, private market and civil society actors play important roles within the disaster cycle and its phases of planning and preparedness, response, and recovery/reconstruction, such as flood insurance providers, owners of critical infrastructure, volunteer organizations, and research institutions. • critical infrastructure is a strategic federal policy area in the field of crisis management and is considered a specific protection subject, resulting in particular planning requirements and regulations; • volunteer organizations cooperate within the vertical structure of disaster management; • flood insurance is currently available in Germany to private customers, while coverage is considered low; and • research on natural hazards is undertaken by public and private higher education and research institutions that can form partnerships with governmental institutions.

Article

Which components should a manufacturing firm make in-house, which should it co-produce, and which should it outsource? Who should sit on the firm’s board of directors? What is the right balance between debt and equity financing? These questions may appear different on the surface, but they are all variations on the same theme: how should a complex contractual relationship be governed to avoid waste and to create transaction value? Transaction Cost Economics (TCE) is one of the most established theories to address this fundamental question. Ronald H. Coase, in 1937, was the first to highlight the importance of understanding the costs of transacting, but TCE as a formal theory started in earnest in the late 1960s and early 1970s as an attempt to understand and to make empirical predictions about vertical integration (“the make-or-buy decision”). In its history spanning now over five decades, TCE has expanded to become one of the most influential management theories, addressing not only the scale and scope of the firm but also many aspects of its internal workings, most notably corporate governance and organization design. TCE is therefore not only a theory of the firm, but also a theory of management and of governance. At its foundation, TCE is a theory of organizational efficiency: how should a complex transaction be structured and governed so as to minimize waste? The efficiency objective calls for identifying the comparatively better organizational arrangement, the alternative that best matches the key features of the transaction. For example, a complex, risky, and recurring transaction may be very expensive to manage through a buyer-supplier contract; internalizing the transaction through vertical integration offers an economically more efficient approach than market exchange. TCE seeks to describe and to understand two kinds of heterogeneity. The first kind is the diversity of transactions: what are the relevant dimensions with respect to which transactions differ from one another? The second kind is the diversity of organizations: what are the relevant alternatives in which organizational responses to transaction governance differ from one another? The ultimate objective in TCE is to understand discriminating alignment: which organizational response offers the feasible least-cost solution to govern a given transaction? Understanding discriminating alignment is also the main source of prescription derived from TCE. The key points to be made when examining the logic and applicability of TCE are: (1) The first phenomenon TCE sought to address was vertical integration, sometimes dubbed “the canonical TCE case.” But TCE has broader applicability to the examination of complex transactions and contracts more generally. (2) TCE could be described as a constructive stakeholder theory where the primary objective is to ensure efficient transactions and avoidance of waste. TCE shares many features with contemporary stakeholder management principles. (3) TCE offers a useful contrast and counterpoint to other organization theories, such as competence- and power-based theories of the firm. These other theories, of course, symmetrically inform TCE.