Structuring Conditions of Public Sector Capabilities: What are they and why do they matter for city governments?
by Kwame Baafi, Ruth Puttick, and Maria Nieto Rodriguez
City governments are, as a rule, idiosyncratic. They can look and feel different, they can face different challenges, and work in different ways. Yet there are similarities. Understanding the patterns in and consequences of commonalities between city governments around the world is essential for our work to develop the Public Sector Capabilities Index, a global measure of city governments’ problem-solving abilities. As researchers, we want to ensure we are making meaningful comparisons between city governments, and for city governments, we know they want to learn from and emulate cities like them.
Here we set out how we are exploring these similarities by incorporating city governments’ structural conditions into our measurement approach, and why these wider conditions matter for city governments and their dynamic capabilities.
In a recent blog, we said that, “This journey of understanding how context shapes capabilities is just beginning. Like the fish in David Foster Wallace’s famous “This is Water” commencement speech, we often fail to see the most obvious and important realities — the water we swim in daily. The national context surrounding city governments is precisely that kind of water: omnipresent, essential, yet often invisible to those working within it”.
So that we may see what is essential, yet often invisible, we are developing a methodology that considers the role of structural capacity — the wider conditions — that affect city governments’ ability to develop and deploy dynamic capabilities to solve problems.
Before we get into more detail on what we are doing, let’s start by defining our key terms:
- Structural capacity considers how differing configurations of structuring conditions influence the development and deployment of the ‘skills, capabilities and resources necessary to perform policy functions’. For example, City X is wealthy, densely populated, and has the ability to raise taxes and increase income. In comparison, City Y is developing, densely populated, and has limited control over its ability to raise money. These factors can be enablers or act as constraints and require the cities to employ distinct capabilities to navigate them.
- Public sector capacity is the ability to implement official goals. Hanson and Sigman elaborate on how state capacity is a key dimension of structural capacity, saying, ‘the state’s ability to perform the core functions most commonly deemed necessary for modern states: protection from external threats (Tilly 1990), the maintenance of internal order, the administration and provision of basic infrastructure necessary to sustain economic activity (Mann 1984), and the extraction of revenue (Levi 1988; North 1981; Tilly 1990)’.
- Structuring conditions are individual factors city governments have no direct control over, but which play a crucial role in shaping their operations. These conditions may be legal, political, economic, and social.
Why study structural capacity?
Structural capacity is the essential foundation of city government operations but often exists independently of specific policy choices. Structural capacity is particularly significant within the structure of the Public Sector Capabilities Index because it defines the facilitating environment within which governments develop and exercise dynamic capacities.
As the diagram below shows, structural capacity has three dimensions — legal-institutional characteristics, state capacity, and physical and socio-economic characteristics:
So, what does this mean in reality? In short, a country or city with strong structural capacities typically can:
- withstand shocks.
- implement long-term strategies.
- and sustain economic development.
The link between structural capacity and dynamic capabilities: our hypothesis
While structural capacity provides the foundational elements, the concept of dynamic capabilities relies on the ability of city governments to develop, learn, and innovate over time in line with changing circumstances. This includes the capacity to identify and pursue strategic missions, coordinate activities across different sectors, and foster innovation within public services.
The Public Sector Capabilities Index is built on a central hypothesis that dynamic capabilities in city government are shaped, enabled, and constrained by structural capacity.
In other words, the interplay between structuring conditions shapes the ‘opportunity space’ of a city government, influencing the set of decisions that are more and less likely to be made. This is what leads to heterogeneity in the development and deployment of dynamic capabilities according to structural capacity. For instance:
- City governments operating within structuring conditions that provide a supportive and coherent environment, but whose dynamic capabilities are underdeveloped, may risk stagnation due to bureaucratic rigidity and a lack of innovation.
- City governments facing structuring conditions that impose greater operational constraints or fragmented authority, but possessing strong dynamic capabilities, may pursue ambitious reforms yet face a heightened risk of failure due to limited institutional support.
- City governments whose structuring conditions create a more open and flexible environment and that have developed strong dynamic capabilities have the greatest potential for effective governance and long-term policy innovation.
These patterns suggest that different structural configurations create different sets of opportunities and constraints. As a result, cities within the same structural cluster may develop similar types of dynamic capabilities to respond to comparable challenges, while cities in different clusters will often require different kinds of dynamic capabilities to succeed. Structural capacity does not deterministically produce dynamic capabilities — but it can fundamentally shape the kinds of problems governments face, and the strategies needed to solve them.
Importantly, structural capacity is not deterministic. Similarly structured cities can still have varying dynamic capabilities depending on local environments, leadership, and policy decisions. The Public Sector Capabilities Index’s assessment approach, therefore, acknowledges that different cities may face unique challenges, even within similar governance conditions.
Studying structural capacity is important for the Public Sector Capabilities Index for two reasons. First, the link between structural capacity and city governments may help to understand city governments’ individual ability to build and flex dynamic capabilities. Second, it is important to understand similarities and differences between city governments.
How we will measure structural capacities
Measuring structural capacity is a significant challenge because it is a latent construct and cannot be observed directly. Instead, researchers like us rely on a range of indicators that are theoretically linked to its various dimensions.
For the Public Sector Capabilities Index, we are developing a methodology that combines quantitative and qualitative metrics to measure the structural capacity and dynamic capabilities of city governments around the world.
The data collection approach involves:
- Cluster Analysis
• Structural capacity is measured through cluster analysis, through which we can group cities based on their similarities and differences.
• We are integrating indicators such as decentralization, fiscal autonomy, GDP per capita, and governance effectiveness to provide a comprehensive picture of a city’s structural capacity. These measures allow for context-sensitive benchmarking, helping city governments learn from peers with similar structural conditions.
• This avoids misleading comparisons by evaluating city governments against their “peers”. (A technical paper will be published on this soon) - Elite interviews
• A structured elite interview is being developed to assess how dynamic capabilities emerge and function. This will be conducted with city government officials. We are currently testing this assessment approach in workshops with city governments.
By integrating structural capacity into the Public Sector Capabilities Index, we aspire to move toward a more nuanced, more effective understanding of governance.
This approach identifies relative strengths and weaknesses within similar contexts so policymakers can:
- Identify capability gaps in their structural constraints
- Benchmark performance against relevant peer city governments
- Target investments for capability building
- Develop dynamic capabilities that work within their governance realities
Structural capacity shapes what is possible — and what is likely — in city governments. We are now collecting data to better understand their link to dynamic capabilities. This is not just an academic exercise. We hope that having a better understanding of these constraints will allow city governments to design and adopt interventions in accordance with their context and structural conditions rather than borrowing models from vastly different governance contexts.
Get involved
We are exploring methodologies and approaches to analyse structural capacities and their interaction with dynamic capabilities. Over the coming months, we will update on our progress through blogs and working papers. In the meantime, we are very keen to hear any feedback and comments. If you have ideas to share, please contact Ruth Puttick, r.puttick@ucl.ac.uk
