Negotiating performance agreements in the
Belgian social Security network
Tekstmodel
hier and the network theory
Testing the principal-agent
EGPA Conference 2006
Study Group VI
Governance of Public Sector Organizations
Belgian Social Security network : Mgt contracts
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September 2006
1. Social Security
and performance
Tekst hier
agreements
Belgian Social Security network : Mgt contracts
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September 2006
Social security : concept
System of public social insurance covering
social risks
Direct contributions
Employers’
organisations
Trade
unions
The employees
24%
The employers
40%
Governance of
the public
institutions
Performance
agreements
Taxes
36%
Belgian State
Belgian Social Security network : Mgt contracts
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Contract management
Performance agreements in 15 Social Security Public
Institutions (SSPI) (2002/2003) :
 Between the Federal State and the SSPI
 12.000 employees concerned
 Budget 870 millions €/year
 Three years period
 Management autonomy (budget, HRM, facility)
Two-way agreement
 Output level : organizational performance levels
 Financial framework for three years
 Commitments from the State
Implying
 Accountability
 New relationship with the State
Belgian Social Security network : Mgt contracts
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September 2006
2. Mapping theTekst
negotiation
process
hier
Belgian Social Security network : Mgt contracts
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September 2006
Basic assumptions from the theories
Principal-Agent

15 specialized and thus
individual negotiation processes

Divergent interests between State
and SSPI

Information advantage for the
SSPI

Behavior Belgian State
determined by the results of the SSPI
(quality of the information)
Network coordination


Tripartite Negotiations
Decision making network based
on gradual common agreement

Auto-coordination by SSPI and
minister’s cabinets

Autonomy and performance
agreement are accepted by all
parties
Belgian Social Security network : Mgt contracts
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September 2006
Process- and chain management as backbone
 Basic assumptions led to chain management
 Process mapping has been agreed by all parties
Secundary
process
Primary process
Original
input
Step 1
Involved
actors
Secundary
process
Secundary
process
Intermediary
Output
Involved
actors
Secundary
process
Step 2
Involved
actors
Belgian Social Security network : Mgt contracts
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Final
Output
Involved
actors
September 2006
3. Testing
the theories
Tekst hier
Lessons learned
Belgian Social Security network : Mgt contracts
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September 2006
Our observations and the theories
Observations
Principal-Agent
Network
Multipartite negotiations
besides one to one
Exclusively individual and
one to one
Multipartite and global
Changing coalitions and
oppositions
Conflict between principal
and agent
Global cooperation
Principal > Agent
Principal < Agent
Not needed
Autonomy in danger
Autonomy is accepted and Autonomy is accepted and
is a pre-require
is a pre-require
Successful central
steering
No steering : contract
relations
No steering : autocoordination
Multiple logics are active
Ex post results
Global targets
High transaction costs
Low transaction costs
Low transaction costs
Belgian Social Security network : Mgt contracts
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September 2006
Lessons learned
The contracting cycle must be structured
as a compromise between both theories
 One to one relationship remains the model
 Multipartite processes are sometimes inevitable
 Negotiation and evaluation processes increase the
possibility of conflicts
 Convergent interests and coalitions are the keys for
successful processes
 A central function facilitates the processes and limits the
transaction costs
 The contract cycle is not only structured by the contractual
and rational logic
Belgian Social Security network : Mgt contracts
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September 2006
For more information
Amaury Legrain
FPS Social Security – DGSOC
[email protected]
[email protected]
5E20
Place Victor Horta 40, 20
1060 Bruxelles
0032 (0)2/528.63.12
Belgian Social Security network : Mgt contracts
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September 2006