Trust

Since 1990, socio-economic local development policies have changed their physiognomy. Public actors have involved private entities in the decision-making process related to those policies that affect local development, creating agreements called public-private partnerships. Their spread represents one of the first bricks for shifting territorial governance from a top-down to a bottom-up process. Studying this phenomenon, we paint a new picture of territorial governance characterised by ethical principles able to promote local development, improving citizens’ wellbeing.

Changes in socio-economic structures have led to a number of radical responses towards social and economic development policies. Public actors have argued that development may be achieved by involving private actors, creating public-private partnerships (PPP). PPP are organisations that involve public and private efforts to create the basis for social and economic development of a defined territory.

Many scholars who study this process argue that it undoubtedly represents a tangible signal of the transformation of governance systems (OECD, 2004; Glendinning et al., 2002; Graziano and Vesan, 2008).

These organisations, spread all over the world, are particularly stimulated by a large number of European initiatives, such as the Leader Programme, which encourage the creation of Local Action Groups (LAGs) to promote local development. LAGs are local partnerships that combine public and private resources, increase and promote dialogue, stimulate active participation and co-operation among local actors, and improve the area’s economic competitiveness (European Commission, 2006).

If we consider territorial governance such as a socio-economic system rooted in a network of socio-political and economic relations among actors that engenders a new political economy for a specific territory (Argiolas et al., 2009b), the role of PPPs, and thus, of LAGs, has been well researched.

In order to better delineate this emergent situation, we used a mix of qualitative and quantitative research methods. The sample is composed of 63 Italian LAGs. Data gathering employed a longitudinal methodology. We analysed databases from the official organisations involved in partnership development and published by LAGs in hard copy and electronic format. The document analysis has underlined that LAGs’ activities can aid the development in rural areas. By analysing the Plans of Local Development, consulting archives and examining other documents many interesting aspects have emerged. Many words and expressions were more frequently used than others, for instance: ‘territorial identity’, ‘local productions’, ‘citizen participation’, ‘listening’, ‘co-operation climate’, ‘dialogue’, ‘reciprocity’, ‘trust’, ‘conflict’ and ‘consensus’.

In light of this, we have been able to identify nine fundamental aspects that appear to suggest an important change in governance systems. These are 1) the importance of territorial identity 2) a mind that is open to change 3) a co-operative climate 4)) active listening 5) dialogue 6) conflict, in the sense of comparison 7) trust 8) reciprocity and 9) consensus.

Furthermore, we prepared and sent out questionnaires composed of ten groups of dichotomous questions in order to understand the relevance of the mentioned variables that emerged during the study of the documents.

To analyse the answers and understand the results, we used a novel statistical technique that allows us to cluster LAGs according to survey answers made by quantitative and categorical variables. Usual cluster techniques do not allow such mixing and this motivated us to use the well-known Ward method for clustering, where distances among LAGs are calculated with a random forest model as described in (Breiman, 2001). Once we recognised that some of the cluster LAGs partially match the abovementioned theory, we quantified the probability of such theory to being true in other hypothetical populations of LAGs without imposing the assumption, typical of classical statistics, of an infinite interviewing process of a similar population of LAGs (past and future LAGs, wherever they may be). This result can be obtained by applying the well-known Bayes Theorem in a context of imprecise probabilities (Waley, 1996). In this context, we consider a very large class of prior probabilities about trueness/falseness of our theory. Such an approach, which ends by calculating a very simple formula (Waley, 1996), provides a lower and upper bound for the probability that our theory is true, conditioned by the survey. Probability lies between 32% and 39% and this positive result, combined with our qualitative analysis, allows us to argue that public-private partnerships have a profound impact on territorial governance and contribute to the creation of another mode of governance that we call ‘Partnership Governance’ (Argiolas et al., 2009a, 2009b; Dessì & Floris, 2009).

Partnership Governance is a form of multi-stakeholder governance (Freeman, 1984) because it involves all stakeholders in the decision-making process. It is based on:

1.    The foundational importance of territorial identity. In a scenario in which global and local trends coexist, differentiation must be respected. To survive in this new international environment, each territory must develop skills to promote its peculiar aspects.

2.    Open mentality towards change. This is the result of a long adaptive process and the acceptance of new modes of governance and innovative ways of managing relationships. To create new opportunities and possibilities, a mentality of openness, reception to change, and the promotion of positive action are necessary.

3.    Spread of a co-operative environment. This represents the result of the subordination of personal interests to achieve the common good. To encourage this, public and private actors must co-operate to obtain benefits and synergies.

4.    The practice of active listening. Active listening allows free personal expression and is essential in negotiations where individuals present their ideas and opinions. Active listening is based on reciprocal acceptance and the creation of a positive environment among interlocutors.

5.    Promotion of constant dialogue. This is the verbal exchange between two or more individuals which facilitates the creation of positive relationships. Partners and citizens can explain ideas, viewpoints, opinions and questions, and others must listen without mental barriers.

6.    Diffusion of trust among partners. Trust is a result of intuitive processes based on the perception of positive values and the acceptance of others. Trust is fundamental to all strong relationships. Actions based on trust discourage broken agreements.

7.    Resolution of conflict dynamics. Conflict exists in all situations in which there are individuals who make decisions or live or work together. Here, conflict is used synonymously with confrontation and considered as a positive situation in which individuals can compare their positions with others, discuss their ideas without bias, and actively participate in debate.

8.    Promotion of reciprocal feelings. Reciprocity is an informal way of managing transactions and relationships. Reciprocity has three main meanings (Bruni, 2008): reciprocity without benevolence; reciprocity philìa; and reciprocity agape. Through this last type of reciprocity, individuals obtain intrinsic rewards that correspond to satisfaction from actions which do not stem from the other individual’s attitude. Thus, a positive answer does not affect the choice of behaviour but affects the result. In time, partnerships operate by respecting reciprocity agape because those who participate in the decision-making process look for collective wellbeing, which simultaneously has individual benefits.

9.    Creation and exploitation of consensus. Consensus is a decision-making process in which decisions are taken when partners accept a proposal, even if this situation does not mean that everybody has the same opinion. To operate in consensus, conflict among partners must be encouraged and co-operatively resolved. This presumes that every partner is aware that the difficulties of each person are the difficulties of the entire partnership. Then, in order to produce a final decision, characterised by the broader support of all of partners, the viewpoint of every individual must be considered. Consensus is not mere legitimisation to act, but a means to share individual perspectives.

In conclusion, partnership governance introduces ethical principles to territorial governance, paying more attention on citizens’ needs, sustainability, cohesion, trust, reciprocity, etc.

This model could be considered, on the one hand, as an innovative way to co-ordinate and manage local relationships and, on the other hand, as an effective application of Territorial Social Responsibility. This can be done through democratic principles applied in the decision-making processes and power decentralisation, sustaining the multi-stakeholder approach as a driver of sustainable socio-economic local development. Moreover, flexible governance as partnership governance can better answer citizens’ and businesses’ requirements because it can listen to their needs and take up opportunities stemming from global and local scenarios.

References

Argiolas, G., Cabras, S., Dessì, C., Floris, M. 2009a. Challenges for New Models of Territorial Governance: Learning from the Experience of Italian LAGs, Proceeding of the Sixty-Ninth Annual Meeting of the Academy of Management, (CD), George T. Solomon (Ed.).

Argiolas, G., Cabras, S., Dessì, C., Floris, M. 2009b. Building innovative models of territorial governance, Journal of Place Management and Development, 2(3).

Breiman, L. 2001. Random forests, Machine Learning, 45: 5-32.

Bruni, L.  2008. Reciprocity, Altruism and the Civil Society, Routledge, New York, NY.

Dessì, C., Floris, M. 2009. Changes in Local Governance. The Role of Public-Private Partnerships, European Journal of Management, 9 (1).

European Commission 2006. The EU Rural Development Policy 2007-2013, Fact Sheet.

Freeman, R.E. 1984. Strategic Management: A Stakeholder Approach, Pitman Press: Boston.

Glendinning, C., Powell, M., Rummery, K. 2002. Partnerships, New Labour and the Governance of Welfare, The Policy Press: Bristol.

Graziano, P., Vesan, P. 2008. New Modes of Governance: Explaining Local Partnership Consolidation, New Gov., Policy Brief, 18.

OECD 2004. New forms of Governance for Economic development, Paris: OECD.

Walley, P. 1996. Inferences from multinomial data: Learning about a bag of marbles, Journal of the Royal Statistical Society B, 58(11): 3-57.