Charles Conteh

Policy implementation in
multilevel environments:
Economic development in
Northern Ontario

Abstract: Recent research on policy implementation has focused on policy intervention across multiple jurisdictions with large numbers of actors, loci and layers. The
present study seeks to contribute to this endeavour by weaving together theoretical
insights drawn from conventional policy implementation, organization theory and
governance. The effectiveness of the integrated framework is verified by examining
the economic development efforts of the Canadian government in Northern Ontario
over the past two decades, focusing on how the federal governments main economic
development agency engages with its provincial and local counterparts, as well as
with organized community and private-sector groups within the region.
Sommaire : Les recherches recentes sur la mise en uvre des politiques se concentrent
sur lintervention politique dans les multiples juridictions ou` interviennent un grand
nombre dacteurs, de lieux et de paliers. La presente etude cherche a` contribuer a` cet
effort en combinant les idees tirees de la theorie sur la mise en uvre des politiques
conventionnelles, de lorganisation et sur la gouvernance. Lefficacite du cadre
integre est verifiee en examinant les efforts de developpement economique du gouvernement canadien dans le nord de lOntario au cours des deux dernie`res decennies,
en se penchant sur la manie`re dont la principale agence de developpement economique du gouvernement federal fait intervenir ses homologues provinciaux et locaux,
ainsi que les organismes communautaires et les groupes du secteur prive au sein de
la region.

Research on policy implementation has been varied but productive since it began in the early 1970s. Over the past two decades, the search for theories on
implementation has focused on the concerted action across institutional
boundaries (Lindquist 2006; OToole 2000). Analytical perspectives on implementation are taking a broader scope to understand policy intervention across
multiple jurisdictions that have large numbers of actors, loci and layers.

The author is assistant professor, Department of Political Science, Brock University. He gratefully acknowledges the comments made by the Journals anonymous reviewers.

C A N A D I A N P U B L I C A D M I N I S T R AT I O N / A D M I N I S T R AT I O N P U B L I Q U E D U C A N A D A
V O L U M E 5 4 , N O . 1 ( M A R C H / M A R S 2 0 11 ) , P P. 1 2 1 1 4 2
r The Institute of Public Administration of Canada/LInstitut dadministration publique du Canada 2011

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This study seeks to integrate existing research on policy implementation

with insights drawn from theory on organization and governance. The aim is
not to delegitimize existing frameworks for understanding policy implementation but, rather, to enrich the discussion by drawing from other
analytical traditions that seek to understand policy processes in diverse,
complex and dynamic policy environments. Such an integrated analytical
framework could combine the strengths of various perspectives on concerted policy action that involve multiple players across institutional
boundaries within and outside the public sector. Moreover, an integrated
analytical framework is consistent with the original mission of research
on policy implementation to identify the connection the missing link
between politics and administration (Hjern 1982).
By looking at the implementation of regional economic development policy in Northern Ontario, this article will demonstrate the utility of the
integrated framework. The problem of economic development is a generic
challenge worldwide, even as resource-rich regions in developed and developing countries struggle to reach a sustainable level of economic growth.
Canada has a long tradition of seeking to alleviate the socio-economic disadvantages of less developed regions (including Northern Ontario) by
intervening in economic development policy.
Provincial governments and municipalities, however, have been similarly
engaged. This article examines the federal governments efforts at economic
development for Northern Ontario and focuses on how its main economic
development agency, FedNor, engages with its provincial and local counterparts, as well as with organized community and private-sector groups,
within the region.

Towards a multi-actor implementation

framework
For the purpose of the present research, I will use the term multi-actor implementation framework to refer to the integrated framework that combines
insights from theory on policy implementation, organization, and governance.
Such a framework is concerned with understanding the nature of interaction
and exchange among organized policy stakeholders in the public sector,
as well as those between public agencies and non-governmental organizations
and the private sector. The goal is to combine the analytical strengths of these
three distinct but parallel analytical perspectives in order to understand
better the policy implementation processes in complex, diverse and dynamic
societies.
The next three subsections of this article will briefly introduce how theoretical perspectives on policy implementation, organization and governance
have each addressed the implementation of policy in the context of multiple

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123

partners. The fourth subsection will integrate these perspectives into a single
framework. The article will then illustrate the benefits of this integrated
framework through an examination of the federal governments intervention that is, its mandating specific agencies to allocate resources to achieve
a particular set of policy goals in economic development policy in Northern Ontario.

Theoretical perspectives on policy

implementation
The term implementation as a popular concept in contemporary discourse
among scholars of public policy dates back to the work of Jeffrey Pressman
and Aaron Wildavsky (1973) in the early 1970s. Research on policy implementation provides the essential link between political and economic
analyses of policy implementation and the organizational/institutional
analysis of public administration (Hjern and Hull 1987). This research has
been through some major phases of development. Three phases commonly
referred to as the first, second and third generations can be identified in the
literature (Goggin 1990; Howlett and Ramesh 1995; Pal 2006). Elaborating on
these approaches is beyond the scope of the present work, but a brief overview, however, will serve as a context for advancing our understanding of
the multi-actor implementation framework proposed here.
When it was originally developed as a field of inquiry, research on policy
implementation was marked by the emergence of a top-down approach in
the scholarly literature (Bardach 1977; Pressman and Wildavsky 1973; Sabatier and Mazmanian 1981). The theoretical and empirical assumptions of this
approach were immediately criticized as excessively mechanistic and unable
to do justice to the realities of policy delivery in democratic societies. The
critics who espoused a bottom-up approach were unified by their effort to
examine the politics and processes of policy implementation, starting from
the frontlines of public administration, where street-level public officials often interact with organized societal interests (Barrett and Fudge 1981; Elmore
1981; Kickert 1997; Klijn 1996). The debates on the relative merits of the topdown and bottom-up approaches were grouped under the label of firstgeneration implementation research (Hill and Hupe 2002).
A consequence of the normative schism between the two traditions was
the theoretical impoverishment of first-generation research on policy implementation. A new generation of scholars emerged in the late 1970s and early
1980s a second generation of research who synthesized the insights of the
top-down and bottom-up approaches into a conceptual framework that consisted of a set of theories of implementation (OToole 1986; Palumbo and
Calista 1990; Sabatier 1986). This synthesis approach, however, has its own
problems especially its tendency to be little more than a combination of

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variables from the two perspectives, which leaves the reader with a long list
of variables and complex diagrams of causal chains (Exworthy and Powell
2004; Linder and Peters 1987; Sinclair 2001).
A third generation of researchers, who distilled the large number of variables into a manageable framework, eventually emerged in the late 1980s
and early 1990s (Winter 1990). They hoped to develop more elegant theories
that could lend themselves to broader generalizations and more longitudinal
inquiries (Goggin 1990). As Laurence OToole Jr. (2000) notes, however, this
effort proved too ambitious, because very few scholars have so far been willing to undertake such inquiries. In the 1980s, moreover, the process of policy
implementation was influenced by structural changes in public administration towards decentralization, devolution of responsibilities, partnerships,
and the restructuring of accountability relationships in service delivery
(Kettl 2000; OToole 2000; Pal 2006). As a result of such transformations,
public policies are increasingly being implemented in concert with non-state
actors in cooperative or collaborative partnership arrangements. These new
inter-organizational partnerships are not merely a passing fancy but are
likely to be permanent features on the landscape of policy implementation
(Kernaghan, Borins, and Marson 2000).
The central concern shared by theoretical perspectives on
policy implementation, organization and governance is
to understand how government organizations interact
with their external environment in the delivery of policies
As a result of transitions towards complex and multi-actor policy processes, the focus of research on implementation shifted from trying to build
meta-theory towards explaining concerted action across institutional boundaries (Lindquist 2006; OToole 2000). Thus, one notices the broadening of the
approach to research on policy implementation into a multi-focus perspective that looks at a multiplicity of actors, loci and levels (Hill and Hupe 2003).
In federal systems, for instance, the different levels of policy action consist of
federal, provincial or state and municipal jurisdictions and their agencies.
The loci of policy action often consist of constellations of ideational and interest coalitions within and outside the state within a policy subsystem
(Sabatier and Jenkins-Smith 1993).

Organization theory
Certain elements of organization theory illuminate the complexity of implementation processes within policy subsystems by situating organizations as
the principal players in the policy process. Policy implementation can thus
be understood as a process that involves a series of interactions among

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public agencies, on the one hand, and between public agencies and organized target-groups within the community and the private sector, on the
other (Schofield 2004; Sinclair 2001).
Organization theorys long tradition of examining the interactions between organizations and their external environment has given rise to two
(competing) analytical approaches to understanding complex organizations:
the closed-systems and open-systems approaches (Denhardt and Denhardt
2003; Thompson 1967). Analysts of open systems focus on understanding the
relationship between public organizations and their strategic (or external)
environment (Denhardt 2004; Tompkins 2005; Wamsley and Zald 1973). As
J.E. Jreisat (2002) succinctly put it, the open-systems approach broke fundamentally from the machine models (closed systems) view of policy
implementation and focused instead on complex relations in the organization and the broader political context within which they operate. Indeed, the
assumptions of order and control that preoccupied early organization theory
led to analyses of power and conflict in organization behaviour becoming
the very essence of policy implementation. Organization theory has thus
been grappling with the need to re-examine policy intervention by public
agencies as a highly complex process in which public agencies engage other
organizations (including community and private-sector organizations), often as partners rather than subordinates.
Donald Kettl (2000) provides a compelling summation of these trends in
his observation that organization theory, in particular, and public administration, in general, are revisiting and adjusting the disciplines analytical
approach to allow for the view that agencies are adaptive organisms that respond to political and technical change in their environment in order to
survive and be effective. Thus, in attempting to further understand service
delivery or policy implementation in complex and dynamic systems, scholars of organization theory are increasingly required to describe and analyse
the relationship between public agencies and their political environments in
order to generate a complete picture of the implementation process.

Theoretical perspectives on governance

The present study conceptualizes policy implementation as institutionalized
policy subsystems centred on a number of organizations with diverse
sources. Therefore, an equally important element in the analysis of the theoretical perspectives on governance is the nature of horizontal engagement
between public agencies and non-state organizations. Insights from governance theory, for instance, have accounted for the actions of organized target
groups and other societal interests in less hierarchical policy-settings
(Agranoff and McGuire 1998; Kooiman 2000; Peters and Pierre 2000; Rhodes
2000).

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Although the concept of governance has escaped a clear definition, in

the context of advanced democracies, it generally refers to a wide variety
of self-sustaining networks through which the state engages in sharing
power and administrative responsibility with non-state policy actors.
The concept has also been widely used in the development literature to
address issues of state capacity and legitimacy in developing countries
(Conteh 2009; Conteh and Ohemeng 2009; World Bank 2009), but this usage
is beyond the scope of the present discussion. Theoretical perspectives on
governance are broad-ranging, from those that identify a dominant
public sector constrained by a constellation of organized societal actors
within a relatively complicated policy subsystem (Peters 2001) to those that
perceive highly complex systems in which adaptive abilities are required of
all members within a network (including public agencies). This adaptive
process has been described as co-evolution (Teisman, Buuren, and Gerrits
2009).
Thus, through the lens of an integrated framework, one can
make two interrelated propositions; first, that the political
legitimacy and coordinating capacity of public agencies are
indispensable elements of policy implementation;
second, that policy implementation can be seen as a complex
mix of hierarchy and collaboration
Some of the major theoretical perspectives on governance include network governance (Keast et al. 2004), governance networks (Kooiman 2006;
Pierre and Peters 2005), and collaborative management (Agranoff and
McGuire 2003). These broad analytical frameworks overlap in many ways
and have been further grouped under themes such as multilevel governance
(Hill and Hupe 2002), transition management (Kooiman 2006; Loorbach
2007), and complex adaptive systems (Teisman and Klijn 2008; Teisman,
Buuren, and Gerrits 2009).
Governance theory views policy processes as characterized by variations
of statesociety relations, with the latter in turn consisting of societal groups
mobilized by principles of self-governance in various forms of joint action
with public organizations. Some scholars of governance refer to this as thirdsector engagement in co-production (Agranoff and McGuire 2003; Kooiman
2000; Peters and Pierre 2000; Rhodes 2000). Governance theory, therefore,
could be seen as reflective of a keen awareness of the realities of politics as an
intrinsic element of public administration. It seeks to identify the nature of
the interaction between public organizations (as necessary agents of policy
implementation) and other organized entities outside the state, often focusing on the frontlines of service delivery.

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Combining the theoretical perspectives

The central concern shared by theoretical perspectives on policy implementation, organization and governance is to understand how government
organizations interact with their external environment in the delivery of policies. A common thread flowing from this shared concern is the need to
reconceptualize power and authority among public and non-state organizations in the policy environment (Rothstein 2003).
In attempting to integrate the insights from these three theoretical perspectives, it is important to identify their distinct elements. Research on
policy implementation has long sought to synthesize top-down and bottomup approaches, which has led to an accumulation of insights into the relationships between various levels of government. One constant challenge is to
understand the tensions between frontline agencies and their head offices. In
federal systems such as Canadas, for instance, these tensions take on a particularly poignant character in the form of inter-governmental jurisdictional
rivalries and frustrated efforts at joint action (Simeon 2006).
Organization theory adds to this by suggesting that the success of
policy implementation is a function not merely of the governments intraorganizational integrity, expertise and coherence but also of its adaptation
to the imperatives of its external environment. This perspective calls our
attention to the willingness or ability of organizations to reorganize their
culture, operations and even their structural features in ways that may involve sharing authority and power, as well developing a learning culture.
How public agencies seek to adjust their mission to reflect the changing values and interests of the local environment thus becomes an important
consideration in understanding policy implementation.
Governance theory, for its part, calls our attention to the emergent phenomenon of third-sector engagement in co-production. The institutional and
ideational forces underlying the shift in policy implementation can be understood as causing a transition from simply delivering and directing to one
of facilitation, coordination and empowerment. The expectations and demands of organized actors outside the public sector imply that the external
environment is not just a set of variables to be manipulated by public agencies. Building legitimacy for effective policy intervention requires public
agencies to identify the main actors within the field and their specific demands and then to seek ways to coordinate the various bases of power. The
structure of support and established feedback loops that public agencies
maintain with local organized actors are, therefore, crucial factors of implementation success in this regard.
Thus, through the lens of an integrated framework, one can make two interrelated propositions; first, that the political legitimacy and coordinating capacity
of public agencies are indispensable elements of policy implementation;

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second, that policy implementation can be seen as a complex mix of hierarchy and collaboration. Inter-organizational interactions in this context are
both cooperative and conflictual, as public agencies navigate through various levels of constitutional and policy jurisdictions while at the same time
striving to gain legitimacy and positive feedback from non-state policy
stakeholders. Structured hierarchies are confronted with the need to adjust
their processes to environmental imperatives of horizontal management in
order to maintain system stability, manage change, and deepen the impact of
their policy intervention.
In conclusion, the multi-actor implementation framework views policy
implementation as diverse expressions of inter-organizational cooperation
among public agencies, on the one hand, and between state agencies and
organized societal interests, on the other. These inter-organizational cooperative efforts are seen as strategic networks of complex relationships
involving inter-governmental cooperation among agencies with similar
mandates from different levels of government, and statesociety partnerships incorporating community development organizations and business
groups. The case study in the next section seeks to verify the effectiveness of
the multi-actor implementation framework.

Federal economic development policy in

Northern Ontario
This section examines the federal governments economic development policy intervention in Northern Ontario over the past two decades. The goal is
to illustrate the benefits of the proposed multi-actor implementation framework. Data was collected through content analysis of regional development
policy and program documents and through a series of semi-structured interviews with officials of organizations within and outside the Canadian and
Ontario governments that are involved in regional economic development in
Northern Ontario. Interviews were conducted with senior and mid-level
officials at the Federal Economic Development Initiative for Northern Ontario (FedNor), which is the main federal organization responsible for
delivering economic development programs to transform the regions dependence on a primary-resource economy.
Interviews were also held with officials at the Ontario Ministry of Northern Development, Mines and Forestry the main ministry responsible for
the provincial governments economic diversification initiatives in the region. Other interviews were held with the representatives of the
Northwestern Ontario Municipal Association, the Northeastern Ontario
Chambers of Commerce, and the Northwestern Ontario Associated Chambers of Commerce. Finally, other interviewees included several agencies and
actors at the municipal level, in the private sector, and in non-governmental

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organizations, including the Nishnawbe-Aski Nation, a representative body

of aboriginal peoples in the region.
Before dwelling on the dynamics of the federal governments economic
development policy intervention in Northern Ontario, however, a brief background sketch of this policy is in order. Against the backdrop of a historical
and national context of regional economic development policy in Canada,
we can then examine its manifestation in Northern Ontario.

Background
The economic history of Canada as a staples system means that the Canadian
state has shown a tendency to maintain strong elements of interventionism
in its approach to national development (Nelles 2005). In social policy, such
interventionism crystallized into a gradual transition to collectivism, with its
most recent manifestation over the past five decades as a developed welfare
state (Brooks and Miljan 2003). In economic development policy, a key example of active policy intervention in society has been the governments
effort to correct structural imbalances in industrial diversity and growth
among the regions (Careless 1977). From its humble beginnings in the creation of a number of uncoordinated boards and agencies in the early 1960s,
regional development policy has become an enduring feature of public policy and governance in Canada.
Regional economic development policy can be traced back to the Royal
Commission on Canadas Economic Prospects (the Gordon Commission) of
195557, which urged Ottawa to focus on a developmental approach for correcting regional disparities, noting the need to develop regional economies
rather than merely compensating provinces for rates of economic growth
lower than those achieved by the country as a whole (Canada, Royal Commission on Canadas Economic Prospects 1957). The Gordon Commissions
recommendations reflect the countrys desire (at least in economically disadvantaged regions) for a more deliberate focus on regional development
issues aimed at a systematic easing of disparities. The commission maintained that the socio-economic realities of Canadas geographically remote
and structurally fragile regions, such as much of Atlantic Canada,
for instance, justify and, indeed, necessitate the visible hand of the state
as a key agent of resource mobilization and allocation in pursuing economic
development.
Several stages mark the evolution of regional economic development policy in Canada since the 1960s (Aucoin and Bakvis 1984; McGee 1992). The
Department of Regional Economic Expansion, created in 1969, was the precursor to the present institutional configuration of regional economic
development policy in Canada. A major restructuring in 1987 led to the creation of three regional development agencies: Western Economic
Diversification Canada; the Atlantic Canada Opportunities Agency; and the

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Federal Economic Development Initiative for Northern Ontario (FedNor)

(Beaumier 1997; Canada, Office of the Auditor General 1995). (Northern
Quebec eventually acquired its own development agency in 1991.) While
other federal regional development entities are separate departments, FedNor was subsumed under Industry Canada. The creation of these new
agencies was part of a trend towards larger regions for developmental programming in Canada. In Northern Ontario, as in the other regions, the
emphasis was on strengthening large-scale regional economies and promoting industrial diversification.

FedNor in Northern Ontario

Northern Ontario is a region with a vast land mass and small population.
Although it covers approximately 800,000 square kilometres, representing
almost ninety per cent of the Ontario land mass, the region only has a total
population of approximately 786,500 about six per cent of that of the province. Its economy is dominated by five large population centres: Sudbury,
Thunder Bay, Sault Ste. Marie, North Bay and Timmins. The history and
structure of industry in the region confirms a trend of persistent decline in
the mainstays of the economy (mostly primary resource industries), with a
gradual shift towards service industries but a general decline in industrial
activity and a traditional weakness in secondary manufacturing and service
industries (the presence of pulp and paper mills notwithstanding) (Bollman,
Beshiri, and Mitura 2006). The share of employment in primary and manufacturing industries declined, from twenty-eight per cent in 1981 to sixteen
per cent in 2001 (Southcott 2006). The picture of industrial stagnation and
even of decline is reflected in socio-economic indicators like a high unemployment rate, low average income, and net outmigration relative to the rest
of the province.
Before 1987, the federal governments economic development initiatives
for Northern Ontario were indirect, with funds for rural and northern development in the region channelled through the provincial government
(Ontario, Ministry of Treasury, Economics and Inter-governmental Affairs
1973). With the 1987 restructuring (and the creation of FedNor), the federal
government decided to deliver its own economic development programs directly. The agencys mandate, broadly speaking, is to promote economic
growth, diversification, and job creation in Northern Ontario (Canada, Office
of the Auditor General 1995; Goldenberg 2008).
FedNor has two main programs, the Northern Ontario Development
Program and the Community Futures Program. The first program promotes
economic development and diversification by providing repayable and
non-repayable contributions to non-profit organizations and small and
medium-sized enterprises. It is an all-embracing program, covering almost
every sector. The Community Futures Program supports the twenty-four

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Community Futures Development Corporations part of a larger national

program supporting community economic development and small-business
growth in disadvantaged regions located in Northern Ontario. FedNors
two programs have thus been designed to address some of the challenges in
structural, sectoral and community economic development facing the region
by improving access to capital for small business and supporting community economic development endeavours, as well as providing business
information and market intelligence for the private sector.
Whereas other regional development agencies, like the Atlantic Canada
Opportunities Agency and Western Economic Diversification Canada, enjoy
considerable departmental autonomy, a distinct feature that initially shaped
FedNors implementation of economic development policy was that it was
largely subsumed under the direct purview of Industry Canada (Canada,
Office of the Auditor General 1995). This structural characteristic meant
that although the agency was, in principle, mandated to work with the
private sector, community partners and other organizations, it lacked
policy discretion to sustain credible partnerships at the frontlines (personal
communication with senior official, FedNor, Thunder Bay, 2009). FedNors
mandate was, however, consistent with the normative preferences of the topdown approach to policy implementation in prevalent scholarly literature.
Since FedNors programs were based on policies developed within Industry
Canada, the agencys ability to adapt to the imperatives of its external environment was constrained. This constraint did not mean, however, that
FedNor officials were opposed to working with local partners. In fact, in
the early to mid-1990s, FedNor officials made efforts to work with community groups in program delivery (Canada, Office of the Auditor General
1995). The problem was that the agencys model of governance was generally perceived to be too hierarchical (personal communication with council
member, Northwestern Ontario Municipal Association, 2009).
FedNors efforts to create an environment of consultation and partnership
involving communities, businesses and other levels of government were
hindered by the fact that the agency was principally a program-delivery organization without authority to develop its own policies or to deviate from
those set within the framework of Industry Canada. Thus, although a principal feature of the new policy and organizational configuration of 1987 was
a decentralization of administrative and policy functions away from Ottawa
and towards the regions, this was not the case for FedNor in Northern Ontario. If the new approach after 1987 was to allow for more direct interaction
between local federal agencies and the community in the design and implementation of programs, FedNor was given no authority to engage in it.
The operational framework of FedNors mandate at birth was what the
first-generation critiques of top-down models of policy implementation
would have described as excessively mechanistic and unable to do justice

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to the realities of policy delivery in democratic societies or complex multilevel jurisdictions. Also, analysts of the open systems described in
organization theory would have referred to FedNors mandate fundamentally as one using a machine model or a closed systems view of policy
implementation that de-emphasizes the complex relations in the broader
political context within which agencies operate.
In the early 1990s, disaffection with FedNors implementation model began to surface from isolated quarters in Northern Ontario. Since the late
1960s, successive governments in the province have been involved in promoting economic diversification in the region. Before 1987, most federal
resources for economic development in Ontarios socio-economically disadvantaged regions were channelled through the Ministry of Northern
Development and Mines (the ministrys name changed several times over
the past five decades and, since 2009, now includes Forestry). This meant
that the ministry enjoyed a rather hegemonic and unrivalled status in the
provinces economic development and program delivery. Thus, the ministry
viewed FedNors mandate and operational model with some curiosity. And
inasmuch as FedNor wanted its mission to be consistent with the core values
and interests of the local environment, the agency took note of the ministrys
jurisdictional sensitivities (personal communication with FedNor official,
Sudbury, 2009).
This development can be understood through the lens of the emergent
focus of research on policy implementation across institutional boundaries.
According to this approach, the implementation of FedNors programs in
Northern Ontario would have to be contextualized within Canadas federal system, with its different levels of policy action at the federal, provincial
and even municipal jurisdictions. In this regard, the challenges of intergovernmental coordination can be seen in FedNors relationship with the
Northern Ontario Heritage Fund Corporation, the agency that delivers the
ministrys programs (personal communication with middle-level ministry
official, Thunder Bay, 2009). The corporation performs functions similar to
those of FedNor, like providing financial assistance and advice to business,
primarily through industrial and regional development programs designed
to fill gaps in capital markets. It also supports industries in manufacturing
and related activities, tourism operations, and exporters. It finances projects
and firms that are commercially viable but that, because of high risk, would
not be financed by private financial institutions.
FedNor thus had to work around its structural constraint in order to incorporate more inter-governmental coordination with the Ministry of Northern
Development and Mines. For the ministry, however, inter-governmental
coordination meant that FedNor had to incorporate considerable elements
of the ministrys policy vision into its own development programs. This
would mean that policy direction for FedNor could not simply come from

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outside the region (personal communication with ministry official, Thunder

Bay, 2009). A better way to understand this apparent complexity is the insight provided by analysts of open systems. Their focus is on the relationship
between a particular public agency and its strategic (or external) environment. In their rejection of the machine models (closed systems) view of
policy implementation, analysts of open systems emphasize the complex relations between public agencies and the broader political context within
which they operate. The assumptions of order and control that may preoccupy Industry Canadas relationship with FedNor, for instance, are viewed
as simplistic and thus threaten FedNors potential failure. A way out of the
impasse was for FedNor to be given the authority to re-examine its policy
intervention in Northern Ontario in terms of a highly complex process in
which the agency must engage other organizations such as the ministry and
its affiliate agency, the Northern Ontario Heritage Fund Corporation.
The complexity created by the inclusion of municipalities
(in addition to the province) into FedNors policy space is
the ideal image of what implementation research refers to
as the challenges of concerted action across institutional
boundaries
Clearly, within such a context, FedNors adaptive abilities were extremely
important to the agencys success at navigating through inter-governmental
tensions. The challenge presented to FedNor is to balance the imperatives of
its relationship with Industry Canada while at the same time addressing jurisdictional sensitivities at the frontlines of its operations. What makes the
challenges of inter-governmental coordination even more significant for policy intervention, from FedNors standpoint, is the fact that Canadian
federalism makes the provinces the primary players in regional economic
development (Simeon 2006). Major areas where the provinces have flexibility in developing policy include the determination of which resources will be
developed, how, to what extent and by whom, and the extent of local public
input into policies and plans and of participation in implementation. A long
history of province-building in Canada has led to the development of strong,
wilful provincial states bent on pursuing provincially defined economic
strategies that sometimes seek to compete with or displace the federal government wherever and whenever possible (Simeon 2006).
Other challenges to FedNors model of program delivery emerged from
municipalities. Around the late 1990s, ideational shifts in the conceptualization of economic development focused on community economic development
(Goldenberg 2008). Paradoxically, local regions seemed ever more eager to
manage their own economic destinies in the face of globalization. In Northern

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Ontario, major municipalities such as Sudbury, Thunder Bay, Sault Ste. Marie and Timmins began to take more assertive stances in demanding that the
provincial government rethink its engagement with local entities. Municipalities no longer wished to be treated simply as clients of economic
development programs. They viewed themselves as better equipped in
terms of organization, knowledge and technology to serve as conduits of
economic development in the region (Northwestern Ontario Municipal Association 2007). Municipalities perceive themselves to be closest to the
problems of local economic development and therefore believe they should
be viable partners, with insights considered germane to policy development
and program design and delivery. Consequently, municipalities increasingly
expect to be part of any policy and governance structure aimed at addressing
the ills of their regional economy (personal communication with councillorat-large, Thunder Bay).
In essence, FedNor was confronted with yet another wave of demands for
the agency to work more closely with other levels of government. The complexity created by the inclusion of municipalities (in addition to the
province) into FedNors policy space is the ideal image of what implementation research refers to as the challenges of concerted action across
institutional boundaries. The three orders of government, each with their
competing jurisdiction, constitute the multiplicity of actors, loci and levels
that Michael Hill and Peter Hupe (2003) describe. Although municipalities in
Canada are technically creatures of the provinces, FedNors concern about
its political legitimacy in the region meant that the agency could not simply
ignore the risks of failing to respond to municipalities demands for closer
partnership. FedNor was faced with the challenge of reconciling Industry
Canadas national frame of reference in policy development with the particularistic nature of municipalities approach to local economic development.
An example of this challenge is FedNors close engagement with the City
of Greater Sudbury in a project to assess under-serviced industrial land to
determine the viability of future development. In the past, part of FedNors
approach was to consult with Industry Canada officials to prevent local projects conflicting with departmental policies. Rather than setting
preconditions or dictating the terms of the project, the framework of implementation was designed to enable municipal authorities to make projections
and plans about the industrial future of their city. It was not a completely
bottom-up framework either, because, as a partner, FedNor could influence
the direction of industrial assessment and planning in the city.
Furthermore, other developments were emerging outside the institutional
boundaries of the public sector. In particular, aboriginal communities, represented through their treaty organizations within Northern Ontario, have
been increasingly demanding a role as distinct jurisdictional entities in the
planning of the regions economic development (see the Nishnawbe Aski

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135

Nations web site at http://www.nan.on.ca). Significant numbers of aboriginal people are relocating to the urban centres of Sudbury, Thunder Bay,
Sault Ste. Marie, Timmins, Kenora, and Sioux Lookout as they seek further
education and employment opportunities. Their participation is thus
deemed crucial to any forward-thinking approach to the economy of the region (Abele 2006). A recent report (Rosehart 2008) sponsored by the Ontario
government concludes that there is a strong recognition within the region
that all future development initiatives by higher levels of government, municipalities, businesses, industries and other stakeholders must be carried
out in concert with the First Nations. The expectations and demands of aboriginal groups are rooted deeply enough into the fabric of Canadian politics
for FedNor not to view them as just a set of variables to be manipulated.
Building legitimacy for effective policy intervention in a region with
First Nations communities requires a careful identification of their existing
community-governing structures and then coordinating with the various
bases of power.
The private sector also added to the complexity of FedNors policy environment by maintaining that businesses have increasingly been thinking in
terms of the market of regions in their investment calculations. Like municipalities, the private sector, through an umbrella chamber of commerce
(see, for example, the Northwestern Ontario Associated Chambers of Commerces web site at http://www.noacc.ca),1 viewed its participation in the
governance infrastructure of the region as crucial to its prosperity. For instance, the Northwestern Ontario Associated Chambers of Commerce
maintains that domestic and international market pressures require a framework of regional development that goes beyond disparate project-funding.
Establishing more permanent feedback loops between public agencies and
the private sector, the argument goes, would be more conducive to intersectoral and longer-term economic planning for the region.
One way to understand the implications of non-state actors in FedNors
engagement with Northern Ontario is to draw from the theoretical insights
on governance discussed earlier. According to this literature, FedNors activities can be seen as contextualized within an intricate web of statesociety
relations, with the latter in turn consisting of groups within society
mobilized by a desire for self-governance. FedNor is faced with an institutionalized policy subsystem characterized by a number of organizations
within and outside the public sector. The dialectics of horizontal engagement
as conceptualized by scholars of governance would suggest that policy
implementation must take into consideration the perspectives and actions
of organized target groups and other societal interests in less hierarchical
policy settings. Some governance scholars may view FedNors policy intervention in Northern Ontario as one in which a dominant public agency is
constrained by a constellation of organized societal actors within a relatively

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CHARLES CONTEH

complicated policy subsystem. Others may view the whole region as a

highly complex system in which the adaptive ability of FedNor will be
crucial to its successful interaction with the emerging organized interests
in the region.
In the wake of the changes to its policy landscape, FedNor recognized
the need to revisit its regional development policy framework. Part of the
adaptation by the agency was a de facto restructuring, at the turn of the millennium, of its intra-organizational processes for greater autonomy from
Industry Canada to formulate and adapt its policies. It was a significant
development for a more credible pursuit of community partnerships and
close consultation with other agencies (see FedNors web site at http://
www.ic.gc.ca/eic/site/fednor-fednor.nsf/eng/Home). FedNors adaptation to the exigencies of the local environment cannot, however, be seen as a
complete break from the policy influence or even of control by Industry
Canada. Rather, as proposed earlier, the agencys recent emphasis on multiactor negotiations and inter-organizational implementation models can be
seen as a complex mix of hierarchy and collaboration.
The combined theoretical perspectives of policy implementation, organization and governance reinforce our understanding of policy implementation in modern political systems as both cooperative and conflictual, as
public agencies navigate through various levels of constitutional and policy
jurisdictions. Meanwhile, these agencies strive to gain legitimacy and positive feedback from non-state policy stakeholders. FedNors beginnings
within the context of a structured hierarchy were confronted with the need
to adjust to environmental imperatives of horizontal management in order to
maintain system stability, manage change, and deepen the impact of policy
intervention. In this light, the proposed multi-actor implementation framework views FedNors latest strategy of policy implementation as consisting
of inter-organizational cooperation between FedNor and other public agencies, on the one hand, and between the agency and organized societal
interests, on the other.
In 2009, for example, the Government of Canada committed $9.5 million
through FedNors Northern Ontario Development and Community Futures
programs to support economic development throughout Northern Ontario.
Although the money was accompanied by broad policy directions for use in
economic development, the rather vague terms of the directives allowed for
considerable local flexibility. FedNors framework of implementation included a distinct emphasis on working with aboriginal and other
community groups, as well as with the private sector, to develop a responsive, business-ready infrastructure for the region (personal communication
with a representative of the Nishnawbe Aski Nations). Given the complex,
inter-sectoral, and highly local nature of regional economic development, FedNor had to adjust its limited policy discretion to achieve wider

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137

environmental imperatives while, at the same time, remaining conscious of

existing accountability structures within Industry Canada. These ongoing
tensions meant that FedNors culture became that of a learning organization (personal communication with FedNor official, Sudbury, 2009). As a
learning organization, FedNor could hope to exploit emerging feedback
loops with the local constellation of organized actors in the region, thereby
deepening its policy intervention.
FedNors recent approach to policy implementation validates the proposition under discussion that the political
legitimacy and coordinating capacity of public agencies
are indispensable elements of policy implementation
For FedNor, the gains from operational flexibility and adaptation have
been more than symbolic. For instance, the agency seems better positioned to
deal with yet another major development that started in the middle of this
decade. In 2005, the Ontario government adopted a broader and more ambitious vision of regional economic diversification for Northern Ontario.
Under the leadership of the ministries of Energy and Infrastructure and of
Northern Development, Mines and Forestry, the Proposed Growth Plan for
Northern Ontario was set in motion by the provincial Places to Grow Act,
2005 (S.O. 2005, c. 13). The strategy calls for comprehensive planning across
all the sectors in the region, with a long-term projection of about twenty-five
years. An administrative framework supporting the Growth Plan has also
been established, consisting of an inter-ministerial forum known as the GNorth Ministers Table. This special committee of sixteen provincial cabinet
ministers, with mandates related directly to issues of economic development
in Northern Ontario, coordinates the Ontario governments approach to policy, planning and direction-setting in the region.
The Ontario governments policy assertiveness in the region has been unfolding rapidly, gaining great momentum and much publicity. Widespread
public consultation and promotion exercises were held around the region
from 2007 to 2009. Whether FedNor views these developments as a threat
is unclear. What is clear is that FedNor officials have participated in consultation and planning conferences, together with representatives from municipalities, the private sector and other stakeholders in the region. Such a
public show of support for ministerial leadership may seem at odds with a
public agencys jurisdictional impulse and ambitions, but forming a united
front with other public agencies is a strategic investment in building legitimacy within its external environments. FedNor cannot be seen to be
opposed to these developments. Moreover, although it is a small agency
compared to Ontarios Ministry of Northern Development, Mines and

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CHARLES CONTEH

Forestry, the federal agencys participation in the new governance framework increases its chances of carving a policy space within the rapidly
changing bases of power in the region. FedNor can maintain some institutional capital to influence the terms of regional development policy and
program coordination in the new environment.
The new framework also seems consistent with FedNors program interest.
It allows public agencies across the levels of government to overcome program
fragmentation and duplication that results from inter-governmental rivalry.
Criticisms about duplication, fragmentation and waste in the past have often
hurt the image of all public agencies (Canada, Office of the Auditor General
1995). For instance, FedNor now promotes its programs as part of a broader
strategic investment in the region, complementing efforts of the Growth Plan
and other initiatives to help communities make the transition to a diversified
economy.
FedNors recent approach to policy implementation validates the proposition under discussion that the political legitimacy and coordinating
capacity of public agencies are indispensable elements of policy implementation The open systems perspective of organization theory suggests that the
success of policy implementation is a function not merely of public agencies
intra-organizational integrity, expertise and coherence but also of their adaptation to the imperatives of the environment within which they operate.
Theoretical perspectives on governance draw our attention to the phenomenon of increasing societal mobilization and engagement in policy
formulation and implementation. These two perspectives thus enrich discussions about policy implementation by seeking to explain the institutional
and ideational forces that underlie the shift in policy implementation. The
integrated insights of these theoretical traditions confirm that policy implementation is shifting from simply processes of delivery and directing to
processes that involve facilitation, coordination and empowerment. In cultivating legitimacy for successful policy intervention, public agencies must
identify the main actors within their field of operation and then seek ways to
coordinate the various bases of power within that policy subsystem.
The political context of economic development in Northern Ontario has
obviously changed considerably over the past two decades. FedNor has
come a long way in its attempts to adapt its model of policy implementation
to the changes in its external environment. It now emphasizes economic development through partnerships among levels of government, First Nations,
non-governmental organizations and the private sector. The ongoing effort
under the Proposed Growth Plan for Northern Ontario to move towards a
more collaborative governance framework can be seen as the culmination of
a long undercurrent of change in the region, and these changes are still unfolding. The agencys willingness and ability to adapt to these emergent
transformations will, it seems, continue to be tested. If past trends are any

POLICY IMPLEMENTATION IN MULTILEVEL ENVIRONMENTS

139

indication, FedNor may have reason to believe that it can survive the complexities of change and remain an effective player in the economic future of
Northern Ontario.

Conclusion
This case study has assessed changing dynamics of inter-governmental and
statesociety relations in the implementation of economic development policy in Northern Ontario. Using an integrated analytical framework that
combines theoretical insights of policy implementation, organization and
governance, this discussion has examined various dimensions of FedNors
relationship with its provincial and local counterparts and with organized
community and private-sector groups in the region.
Viewed through the lens of a multi-actor implementation framework, regional economic development policy in Northern Ontario can be
characterized as propelled by the imperatives of political legitimacy and administrative coordination in policy planning and delivery systems. Policy
implementation, it seems, is a function not merely of public agencies intraorganizational integrity and expertise but also of their engagement with, and
adaptation to, the external environment. Weaving together theoretical insights from policy implementation, organization and governance illustrates
how the implementation process of regional development policy in Northern Ontario has been moving towards diverse expressions of intergovernmental relations and statesociety co-production.
To recapitulate this discussion, as research into policy implementation
undergoes a conceptual transformation to focus on concerted action across
institutional boundaries, integrated analytical frameworks that draw from
other theoretical traditions can enrich our understanding and explanation of
implementation phenomena in complex and dynamic systems. Finally, by
analysing the changing process of policy implementation through a multiactor implementation framework, this study makes a modest contribution
towards identifying the missing link between politics and administration.

Note
1 Another such umbrella organization is the Northeastern Ontario Chambers of Commerce, but
this association is rather more loosely and informally organized. Its activities are now reported in the web sites of the individual municipal chambers of commerce in the northeastern
region of Ontario (e.g., Sudbury).

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