Legitimacy and Effectiveness in Hybrid Organizations: Disentangling the Boundaries Between Politics and Administration

The paper asks how hybrid organizations strategize to provide public services both legitimately and effectively. The question of how to strike the balance between a legitimate and effective provision of public services is directly linked to the “intrinsic function of public administration” which is the “governance of society” (Raadschelders 1999, 288). Instead of the primacy of the state in providing public services, a broad principle of subsidiarity applies today. This principle extends, for instance, through public private partnerships beyond the state administration to privately-organized service providers. Whereas the latter mainly need to ensure that policies be implemented effectively, efficiently, and economically, public organizations must also do justice to the democratic principles of popular control and participation. Solving the tension between legitimate and effective governance is a tricky puzzle per se, which becomes even trickier for hybrid organizations, in which structures and processes of policy formulation and implementation cut across the private and public sectors. The paper first provides an analytical framework that contributes to examining the complex relationship between legitimate and effective governance in public private partnerships. We make use of the ideal-typical dichotomy between two different legitimation logics of politics and administration (Thomann et al. 2016). It illustrates that political legitimacy mainly stems from the democratic institutions of representative decision making and participation (input legitimacy), while administrative or managerial legitimacy predominantly depends on the public perception of how effectively policies are implemented (output legitimacy). This implies two different logics of legitimation: whereas the legitimacy of politics mainly stems from a top-down chain of legitimation, running from the political control level to the managerial control level, the legitimacy of administration predominantly stems from a bottom-up chain of legitimation, running in the opposite direction. Not until both chains complement each other can the legitimacy of hybrid organizations be generated. The distinction between politics and administration furthermore implies a distinction between institutional and organizational legitimacy. As providers of public services are in constant contact with the people, administrative or managerial legitimacy depends on trust as catalyst for the creation of stable relationships between these organization and their target populations. Only when policy implementation complies with the materialistic interests, collective morals, cultural imperatives, and/or ideological expectations of target populations will they conceive of the organization as legitimate. In order to deal with different behavioral dynamics of legitimacy generation, we propose to complement the institutional understanding of input and output legitimacy (Scharpf 1999) with an organizational understanding of legitimacy (Suchman 1995). Finally, the paper applies the developed analytical framework to the recently established Swiss Institute of Translational and Entrepreneurial Medicine, which serves as extreme case where the relevant object of investigation—the need for legitimacy generation in a hybrid organization—is visible in a particularly pronounced way (Gerring 2006). sitem-insel is a not-for-profit public private partnership including several stakeholders, such as universities, university hospitals as well as several private industry partners and is heavily subsidized by the Swiss Confederation and the Canton of Bern.