ABSTRACT
Introduction Portugal is one of the countries in the European Union with the highest levels of inequality in income distribution. According to Rodrigues and Andrade (2013) the financial crisis and the austerity policies applied in 2010 have led to a fall in the efficiency of all redistributive instruments, less efficacy of social transfers, and a reversal in the previous trends of inequality and poverty reduction, and the policy measures implemented in 2012-2013 have accentuated these effects. In this national context the financial crisis also affected the administration abilities of the organisation and provision of municipal (local) public services. The aim of this text is not to discuss the overall effects of the crisis, but to debate some that were obvious at the local level, mainly the effects on local government. The analysis presented here will focus on the Lisbon Metropolitan Area (LMA), which encompasses about 26 per cent of the Portuguese population and comprises 18 municipalities1 with different dimensions and different realities in population, territorial, and economic terms. Urban systems are characterised by relational webs and complex patterns of interdependence that involve actors, institutions, and functions. The manner in which cities and local government structures are organised and managed is determined by and reflects changes in the social, economic, and spatial structure of urban areas. According to a report from the World Bank (1997), the existing differences in the performance of municipalities and states can be explained, in part, by differences in governance. To assess the level of inclusion of governance practices in urban and territorial contexts, different empirical analyses are used with the aim to ascertain whether, in the context of governance, this has eclipsed the government. Although there are ‘new’ political instruments, the change from government to governance can be differentiated in political jurisdictions and even in the type of instruments used. The ‘new’ instruments were also adopted in the provision of public services, and are still mutating at the beginning of the century. There has been an increasing
interest in innovations in the public sector. These are more responsive to the needs and aspirations of the citizens and the users of the services (Altschuler & Behn, 1997; Borins, 1998; Hartley, 2005; Moore, 2005; Mulgan & Albury, 2003; Albury, 2005; Moore & Hartley, 2008). From this perspective it is important to discuss what constitutes public sector innovation, what kind of changes in governance count as important innovations, whether they are sufficient for a rapidly changing society, and what structures and processes promote or slow down innovations (Hartley, 2006; Osborne & Brown, 2005; Moore, 2005). Today, changes in the production systems of the public administration are evident, where the governments try to find, beyond their borders, additional resources to obtain greater operational capacity and legitimacy to achieve their goals. Some innovations involve organisational changes of governance and of the municipal services. In other cases, innovations unite elements from different organisations to create more effective ways of solving existing problems through new approaches and instruments (Skelcher, 2005). The focus of administrative practice is moving from a hierarchical government to a practice marked by greater reliance on horizontal relationships and associative forms of governance (Hill & Lynn, 2004). These changes, in line with other changes associated with networked governance, have implications for management, both in terms of organisational and interorganisational processes. The appearance of new forms of governance is also related to the weakening of the capabilities of the administration, particularly of its financial resources. The first major driver of the economic crisis was the increase in government expenditure. The expenditures, allocated to many services, was more or less automatically affected by inflation. The states undertook the slow and gradual process of restructuring of their governmental expenditure. This has been costly for the state and has found its expression in different programmes, financed with borrowed money, which quickly led to a high budget deficit (Kettl, 2002). Against the background of the above considerations, the current chapter will be structured as follows. First, the key concept of governance will be reviewed. Based on the insights gained the casual factors that equate the capacities of state administration will be discussed. Particular attention will be paid to the interplay between the financial crisis and its effects on the capacities of local government in providing public services to the communities. The chapter continues with a discussion on the recomposition of the state administration in Portugal, especially at the local level and in the municipalities’ organisation models of LMA. It ends with concluding notes.
