Developing a Public Sector Capabilities Index: Lessons from Bogotá, Barcelona, Freetown, Seattle and Seoul

Source: Random Institute on Unsplash

By Rainer Kattel, Ruth Puttick, Mariana Mazzucato, Anna Goulden, Iacopo Gronchi, Fernando Monge, Mia Tarp, Kwame Baafi, Bec Chau, Anjum Dhamija, and Manuel De Feria

It has been a year since the Public Sector Capabilities Index project began. Over the past ten months, we have conducted a literature review, reviewed existing capability frameworks and toolkits, and held in-depth interviews with government officials and wider experts to better understand how capabilities in city governments are conceptualised, cultivated and measured. We capture our findings in our latest report, ‘Developing the Public Sector Capabilities Index: Phase I synthesis report,’ and in this blog where we reflect on our findings to date and look ahead to the next phases of work.

From Bogotá’s award-winning care system (‘Care Blocks’) to Barcelona’s mission-oriented housing strategy, city governments around the world are finding ways to tackle the increasingly complex, fast-moving challenges they face. But despite these growing pressures, there is still a dearth of meaningful measures to understand city governments’ capacity to solve problems and innovate.

The Public Sector Capabilities Index seeks to address this gap. A two-year research initiative led by UCL Institute for Innovation and Public Purpose (IIPP) in partnership with Bloomberg Philanthropies, the Public Sector Capabilities Index will be the first global measure of city government capabilities. By defining and measuring the capabilities that drive change in city governments, the Index aims to support cities both to identify strengths and to build a roadmap for improvement.

Drawing on case studies of Bogotá City Council in Colombia, Barcelona City Council in Spain, Freetown City Council in South Africa, the City of Seattle in the US, and Seoul Metropolitan Government in the Republic of Korea, this blog shares three key lessons from our research to date and some emerging questions for the future of the project.

1. How city governments conceptualise and deploy capabilities

Our research focuses on ‘dynamic capabilities.’ We have defined these as the abilities which enable public sector organisations to adapt their resources, processes and skills to an evolving strategic environment. Through our initial literature review, we identified five dynamic capabilities. We then tested these with five city governments to observe how they are developed and deployed in practice. Below is a summary of what we learned about each dynamic capability.

Table 1. How cities are conceptualising and deploying dynamic capabilities.

So how are cities developing these capabilities? Our research showed that political leadership is critical in setting the strategic direction for capability development and deployment, combined with the ability to recruit and retain talent.

In many cases, external organisations — like philanthropies, development banks, non-profits and the private sector — are important partners in capacity development and can help plug funding gaps. For example, Bloomberg Philanthropies’ What Works Cities program has supported Bogotá City Council to improve its data capabilities. In the City of Seattle, a partnership with the private sector was pivotal for the development of its Affordable Seattle portal through which citizens can access essential services. But establishing and maintaining partnerships requires skill, time and attention. And, if funding stops, there is a risk that project implementation will be disrupted or discontinued.

Emerging Question: How can we develop a shared language around dynamic capabilities that is rooted in the vernacular of city governments?

2. How to assess and measure dynamic capabilities

Measuring dynamic capabilities is not easy due to their tacit, inconsistent nature, and scant literature on their measurement (Kattel and Takala, 2021; Kattel, 2022).

In the Public Sector Capabilities Index project, we are experimenting with methods for measuring dynamic capabilities in city governments — and the routines and contexts in which they are embedded. This involves research into existing quantitative measures of capacity, experimentation with criteria- and perception-based surveys, and observational research with cities. Cities vary dramatically in their geographies, economies, sizes and governance structures: our emerging city government typology helps contextualise measurement of cities through mapping their key characteristics.

The below visualisation depicts how we see dynamic capabilities in relation to the ‘organisational routines’ of city governments (such as monitoring and evaluation, budgeting, and procurement); and the broader context of ‘state capacity’ (including bureaucratic and fiscal structures) which enable public sector organisations to achieve their goals.

Figure 1. Defining the capacities and capabilities of public sector organisations.

Emerging Question: What proxies and indicators should be used to measure capabilities where they are not directly visible?

3. The usability of a Public Sector Capabilities Index

Engagement with city governments showed interest in a tool to help assess and strengthen capabilities to tackle societal challenges. At the same time, our research suggests potential for a framework which codifies and measures dynamic capabilities, helping to accelerate their development.

But what should such a tool look like? We think that a Public Sector Capabilities Index should:

· Be co-designed with city governments to ensure political and administrative buy-in

· Provide context-specific and actionable insights to support learning and improvement

· Be easy to access and interpret, both for cities and wider stakeholders who may use it

· Have a clear value proposition for helping cities — for instance, by improving hiring, upskilling or partnership development

· Help cities learn from each other, promoting collaboration over competition

· Be iterated and adapted to incorporate feedback and changing needs

· Ensure transparency and address measurement biases

Below is our current hypothesis for how a city government official could use the Public Sector Capabilities Index.

Figure 2. City government user journey.

Emerging question: How can we make sure the index is globally relevant and accessible to diverse governments?

What’s next?

Over the coming months, we will continue to expand and deepen our research, working with city governments and other partners to co-design and test the Index and tackle some of the emerging questions highlighted in this blog:

· How can we develop a shared language around dynamic capabilities that is rooted in the vernacular of city governments?

· What proxies and indicators should be used to measure capabilities where they are not directly visible?

· How can we make sure the index is globally relevant and accessible to diverse governments?

If you have any ideas about these questions — or other reflections of what we’ve shared in this blog — please contact Anna Goulden, a.goulden@ucl.ac.uk.

To stay informed about what is next for the development of the Public Sector Capabilities Index, sign up to our newsletter or join our Monthly Insights Meetings. If you would like to be part of the work, we’d love to hear from you. Please contact Mia Tarp, m.tarp@ucl.ac.uk.