Multi-level Governance and the Digital Revolution: Canadian Perspectives
In Canada, as elsewhere, the governance landscape is changing dramatically as powerful new technologies – and the distinctly digital culture they facilitate – catalyse a period of social transformation with deep political and governance-related implications.
April, 08 2019 | Davide P. Cargnello & Maryantonett Flumian
In Canada, as elsewhere, the governance landscape is changing dramatically as powerful new technologies – and the distinctly digital culture they facilitate – catalyse a period of social transformation with deep political and governance-related implications. Changing relationships within government, civil society, and the private sector, as well as decentralising pressures on governments, are calling into question traditional understandings of power and accountability and even the role of the State in the Canadian polity. The issues and challenges governments face increasingly supersede traditional jurisdictions and competencies, prioritising new actors, relationships, and social needs.
This societal shift affects numerous institutions and sectors, from education, to healthcare, to finance; and we are on certainly on brink of still more dramatic changes. Yet, by and large, the significant social changes of the last decades have not been adequately reflected in the structures and modes of working of most governing institutions. The pace of change is so rapid that governments are having difficulty adapting to the changing context – in regulating, in providing service, and in policy development. Canada’s governance frameworks need to adapt in order to align with this changing context.
This article seeks to contribute to a discussion about the evolution of governance in the digital era, by identifying some current trends and contextualising them through two models of ‘multi-level governance’. Although the discussion here focuses on Canada, we hope it is of broader relevance, given the global nature of the issues raised. 
With a changing social and cultural context and changing public expectations about the role of governing institutions, fundamental relationships in the governance ecosystem are also changing. ‘Disintermediation’ refers to the changing and often diminishing role of traditional intermediaries in this digital environment and the changing relationship between individuals and institutions. In the public-sector sphere, traditional authorities – such as governments, and courts – face networks spontaneously forming around complex issues, where new voices expect to be heard, and where their roles are called into question. New intermediating institutions do not always behave similarly to the they are replacing; nor do they necessarily fit easily into old paradigms of public interest.
Over the last few decades, government functions in many countries, including Canada, have been increasingly allotted to organisations beyond the formal control and responsibility of ministers and core government functions are increasingly located at the periphery of formal ministerial accountability. This allotment of governance functions to less traditional institutions located further and further from the heart of government is what we refer to as ‘distributed governance.’ As with other federations, this decentralisation and the corresponding changes in vertical and horizontal accountability and in management are changing the Canadian conception of federalism and its associated institutions. Global digital, disintermediated, and distributed governance trends suggest that new multi-level arrangements, and the concomitant institutional changes these arrangements demand, may be required to achieve the outcome-focused governance flexibility governments need to meet forthcoming challenges.
While its origins can be traced to mid-twentieth century social and political theory, Multi-level Governance was first formally theorised in the 1990s, when inter-governmental relations were changed by the creation of The European Union and its plethora of new governance relationships. The concepts of multi-level governance and federalism are related. Liesbet Hooghe and Gary Marks’ typology of multi-level governance includes a version — Type One — which resembles arrangements that have traditionally prevailed in federations such as Canada. Type One Multi-level Governance is characterised by general-purpose jurisdictions with non-intersecting memberships, a limited number of jurisdictional levels, and a durable architecture. By contrast, Type Two Multi-level Governance has task-specific jurisdictions with intersecting memberships, multiple levels of jurisdiction, and flexible design.
Type One Multi-level Governance, according to Hooghe and Marks, pertains to jurisdictions where membership boundaries do not intersect. The clear, non-intersecting jurisdictions of the constitutionally legislated Canadian federal, provincial/territorial and municipal levels of government represent a Type One Multi-level Governance arrangement. However, the Canadian arrangement has seen complexity increase, as organisations and institutions have arisen to facilitate co-operation across traditional constitutional relations and powers. The Council of the Federation, for example, which represents Canada’s thirteen premiers acting in concert co-ordinates activities to facilitate outcomes with or without the direct involvement of the Federal Government. The creation of Service Canada, where citizens can access a full range of government services, from passports to employment insurance benefits, provides another example of co-operation between governance levels and institutions. They also signal a shift toward Type Two Multi-level Governance, as institutional flexibility overrides jurisdictional rigidity.
According to Hooghe and Marks, Type Two Multi-level Governance concerns jurisdictions that operate with task-specific jurisdictional responsibilities, intersecting memberships, and a fair degree of flexibility in their design and construction. They may include actors from different levels of government and non-governmental stakeholders, and tend to be focused on particular policy issues. Unlike Type One Multi-level Governance models, Type Two approaches tend to favour horizontality in decision-making and accountability. An example of this can be seen in the 1909 Canada-United States Boundary Waters Treaty which addresses water issues (i.e. pollution; declining fish stocks). This task-specific governance arrangement is classic Type Two Multi-level Governance, as the nature of the issues and subjects define jurisdictional boundaries and institutional competencies, rather than the inverse.
Any successful governance system has two overarching objectives: legitimacy and effectiveness. Type One Multi-level Governance models provide legitimacy and effectiveness by stressing clarity and stability. Type Two Multi-level Governance models provide legitimacy and effectiveness by focusing on inclusiveness and responsiveness; they tend to be issue-specific and may form and reform as issues change, whereas Type One systems are generally geographically-rooted and static. Finally, membership requirements may be less restrictive in Type Two systems, allowing for diverse members.
Type One systems tend to foster rigidity at the cost of flexibility but there are times when the stability that rigidity provides may be required. Type Two systems may provide flexibility but may sacrifice stability in order to do so. There are times and contexts in which the clarity and stability of Type One systems may be preferable and others where complex, multi-sector policy issues may require greater responsiveness on the part of governing institutions, as well as the greater adaptability provided by Type Two. Each model entails costs and benefits. The challenge, for Canada at least, is in determining the right level of Type Two Multi-level Governance and where efforts should be devoted in transitioning to this alternative approach.
A virtue of Type One systems is the clarity they provide around accountability, which can be more difficult to discern and manage in Type Two systems. This is a challenge inherent to any approach requiring co-operation and collaboration across institutional boundaries. While it is certainly true that Type Two models will tend to trade off stability for a degree of flexibility, this does not amount to sacrificing accountability for expediency. Crafting adequate accountability practices remains a challenge for any democratic governance system, and Type Two is no exception.
Today’s digital environment provides the tools and technologies required for governments to design policies based on reliable evidence and to track effectiveness. Senior public-sector leadership pursuing outcomes-based policy and informed by credible and reliable data can achieve public objectives efficiently. Consolidated agencies like Service Canada should be the norm rather than the exception and information-sharing across departments, as well as the development of data privacy and security policies that responsibly support this objective, should be aggressively pursued.
Traditional chains of command and the top-down leadership styles that tend to go along with them often hinder the achievement of shared objectives and collaborative institutional agency in a multi-stakeholder, multi-level, and multilateral environment. In order to develop a constructive approach to governance that responds to the needs of a digital, disintermediated and distributed governance context, public leaders will need to help develop a public service culture emphasizing facilitation, collaboration, and individual and institutional agility and resilience. Policy involving indigenous peoples in Canada, for example, has historically been a relatively top-down process but recent developments show a move to a more suitable system of multi-level governance, with different levels of government working together to solve complex problems across and within traditional jurisdictional lines, albeit within the constraints of Canadian federalism. This is one area where progress toward improved outcomes will likely occur thanks to original thinking about multi-level governance. Progress is also possible in other domains – from climate change to finance.
The impact of digital culture on public institutions, the dis-intermediation of traditional authorities, and the increasingly distributed nature of governance are significant trends affecting governance eco-systems. The changing governance context these trends engender requires a paradigm shift in our approach to governance, and multi-level governance provides a promising lens through which to analyse the relationships between and among governing institutions and stakeholders. Public servants and elected officials need to: (1) be willing to think beyond the confines of traditional approaches to governance; (2) acknowledge the need for alternative approaches and to act accordingly. Traditional models of compartmentalised, hierarchical governance need to be re-thought in an increasingly complex digital world, where policy issues cut across jurisdictions and mandates with little regard for legal, regulatory or administrative structures.
Davide P. Cargnello is Vice-President of Public Governance & Research at the Institute on Governance (IOG). Maryantonett Flumian is a seasoned executive, was President of the Institute on Governance (IOG) between 2009 and 2018, and formerly Deputy Minister in the Public Service of Canada.
 A longer discussion of these and related issues can be found in Cargnello & Flumian 2017.
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