How to design and implement the spending review: an analysis on the exogenous and endogenous factors affecting the effectiveness of the spending review process

The objective of this work The thesis conducts a scientific analysis on the international practices and uses of a specific managerial tool: the spending review. In basic terms, the spending review can be defined as a policy instrument that organisations (generally public sector entities) apply in order to control and reduce their spending. In recent years the theme of spending review obtained an increasing relevance on the international scenario, particularly since the advent of the global financial crisis. However, despite the increasing relevance that the spending review has obtained, only an emerging academic literature investigates the phenomenon of the use of spending reviews. The thesis aims at filling this gap of knowledge by investigating how an organisation may effectively design and implement a spending review. The focus of this work is on the use of spending review by central governments. More specifically, the objective of this work is to investigate how a central government may effectively design and use the spending review. Indeed, the viewpoint that drives the thesis is to examine how an organisation may methodologically implement this instrument. Methodological approach To reach its purpose, the thesis follows a theory-building approach (Strauss, 1987; Eisenhardt, 1989). This methodological choice has been set considering the lack in the academic literature of a detailed theoretical framework under which analysing the design process of the spending review. The process of research is based on three different steps. As first step, the thesis defines the spending review, by proposing a conceptualisation of the main features involved in its process based on a review of the academic literature on cutback management in public administrations (i.e. Levine, 1978; Bozeman, 2010; Pollitt, 2010). Establishing a clear definition of spending review is an essential condition for outlining the elements of the effective design of a spending review. Indeed, in the absence of a single univocal definition, different policies may be included under the label of a “spending review”, leading to mistakes and confusion about its use. Then, (as second step) the thesis identifies and analyses those determinants (exogenous and endogenous factors) that may affect the effective use of this tool. To this end, following a meaning-oriented approach to qualitative content analysis (Krippendorff, 1980; Smith and Taffler, 2000) it performs a cross-sectional comparison on five international experiences of spending review implemented in OECD countries. Finally (as third step) the thesis carries out an explanatory case-study (Yin, 1984) based on pattern-matching logic (Trochim, 1989). This logic compares an empirical pattern (the Italian spending review of 2012) with a predicted pattern (the theoretical assumptions previously developed by the thesis following the theory-building approach). Research limitations The main limitation of the thesis consists in the small pattern of empirical cases of spending review examined. This limitation is consistent with the low number of spending reviews at the level of central government up to now present around the world. Indeed, the use of the spending review is spreading in many advanced countries but, in numerical terms, the population of spending reviews is still quite small. Moreover, the thesis is based on qualitative analysis and as such it can’t be directly generalised elsewhere. On the other hand, following a qualitative methodological approach built upon a big amount of evidence collected, the analysis can deeply focus on its research questions, by discovering qualitative issues specific of the institutional and political environment that generally accompanies the spending review process. For this reason, the thesis may result to be of interest also for the countries not comprised in the empirical pattern and for the institutional debate. Key findings In the first part of analysis, the thesis develops a definition of spending review as a managerial process (an ex ante analysis of evaluation) that organisations can adopt to carry out a selective approach to address decline (by identifying non-linear savings). Then, by following this definition, the thesis builds a taxonomy that outlines two different archetypal designs of this tool: the strategic and the technical spending reviews. In the second part of analysis, the thesis identifies a theoretical model composed by two endogenous factors (organisational and process dimensions) and two exogenous factors (political and social dimensions) that may influence the decision-making process of the spending review. The cross-sectional comparison confirms the validity of the four factors since in the majority of empirical cases the dimensions directly affect the spending review process. Finally, as third part of analysis, the thesis outlines some relationships across the exogenous and endogenous factors and discovers the centrality of the organisational dimensions in affecting the final effectiveness of the spending review process. Moreover, this part of analysis shows the importance of the dynamic of time (in terms of timing within the spending review must be carried out) as elements altering the effects of the exogenous and endogenous factors on the spending review process. In this sense, the thesis reveals that when recovery interventions are needed especially in the short period, the spending review is not the best strategy to achieve these outcomes. The potential value of this work Investigating the features of the effective design of the spending review tool represents a high potential target both for scholars, public sector managers and politicians. Indeed, from an academic perspective, this work ambitiously aims at covering an undefined area of research on which, up until now, only an emerging literature operates. While, from a practitioner perspective, a research on the spending review tool may represent a first term of reference for politicians, managers and public sector analysts through which addressing their need of information, data and guidelines regarding how to design, implement and effectively use the spending review instrument. Along these perspectives, the most important contribution that this work offers is the development of a first theoretical framework that detects those factors that have an influence over the effectiveness of the spending review, confirming an emerging view (i.e. Modell et al., 2007; Lounsbury, 2008) that sees organisational change management and neo-institutionalism as two complementary and not rival approaches. In this way, the thesis provides a first theoretical base that can be used by practitioners to direct the ways the spending review is designed, implemented and utilised. 

La tesi realizza un'analisi scientifica sullo strumento manageriale della spending review, finalizzata ad individuare i fattori esogeni (politici e sociali) ed endogeni (organizzativi e di processo) che incidono sull'efficacia finale dello strumento.