Government Service Purchasing from Social Organizations in China: An Overview of the Development of a Powerful Trend

Abstract In this work, we draw on available data to develop a comprehensive picture of the process through which “government service purchasing” has developed in China thus far. We argue that to understand the challenges that have begun to emerge in practice, it is important to look back and understand how government service purchasing has developed to date. Our hope is that by providing an overview of this development process, we can facilitate further research on what we believe is a phenomenon that will have deep implications for the relationships between Party, state, society, and market over the next decades in China.


Introduction
Since the turn of the century, and particularly in the last decade, the development of government service purchasing (GSP) has begun to gradually have a broad and deep impact in China. It has become a phenomenon that merits close attention, not least because of the trend toward purchasing from non-profit, non-governmental organizations -in China referred to as social organizations. The possible implications of the introduction of GSP are profound. This is a model that creates space and potential for social organizations to compete for resources, to develop, and to carve out important roles for themselves. Further, not only could this model lead to greater pluralism in local policy formulation (Teets 2012, 17), it brings the potential for significant shifts in state-society relationships by, for example, separating and redefining roles and responsibilities and substituting government power relations for contractual responsibility-based relations in public service provision (Wang 2015b).
A significant body of literature on this phenomenon has already begun to develop (see for example Han 2009;Li 2001;Li, Jin, and Wu 2015;Su, Jia, Sun, and Han 2010;Xu 2012). But, while there are valuable exceptions, the great majority of this work has been produced in Chinese by scholars and practitioners on the mainland. The main aim of this paper is to facilitate further research by developing a comprehensive picture of the process of the phenomenon's development to date. We examine the surge of official "normative documents" (guifanxing wenjian) introduced by the government and the Communist Party of China (CPC) to create the norms, rules, and regulations for this phenomenon. 1 This is then combined with some preliminary thoughts based on the author's own participation in the developing debate and practice of evaluative methods being used to shape the space created by GSP. We show that the development of GSP is being shaped by the interplay between practice, ideas, and the institutions that shape and are shaped by them. but deeply complicated influence on the design and implementation of GSP institutions. It is the underpinning of the whole process we discuss below.
In the early days of reform and opening, the Party-state's attitude toward groups initiated by ordinary citizens was one of sporadic trepidation and mistrust combined with an otherwise general failure to take social organizations seriously. Its main approach toward the development of social organizations was to attempt to standardize and control (Sun 2011). But gradually the Party-state's system for managing social organizations has, for many, been relaxed and the Party-state has shifted toward promoting social organization development. At the 18th National Party Congress in 2012, Hu Jintao's report to the congress stated the need to: "Develop a modern social organization system in which government is separated from society, rights and responsibilities are clear, and social organizations exercise autonomy in accordance with the law." This signaled a significant turning point in the development of the Party-state's approach to social organizing. It set the scene for a stream of important legislation introduced in 2016 on the non-profit sector, and forms the context in which the development of GSP is taking place.
However, the underlying mentality about the need to control social organizing, and the even deeper sediment of "stability takes precedence over all thinking" (weiwen thinking) (Wang 2014) remains stubbornly present. The new push from the Party-state to support the development of its own "modern social organization system" (Wang 2015a) creates deep contradictions with the weiwen thinking upon which it is superimposed.
As well as this thinking, in practice there is tremendous imbalance in the development of social organizations between different regions and between urban and rural areas. In the eastern region, which has developed rapidly since the beginning of the economic reforms, social organizations too have developed quickly. In regions where economic growth has been slow, social organizations tend to be largely under-developed. Social organizations in rural areas are seriously lacking, while they have developed much more quickly in urban areas.

Main Concerns in Existing Research
In the Chinese language research, there is already a large body of work focusing on the practical issues involved in developing GSP from the perspective of improving efficiency and service quality. Deng Sujin, examining GSP from social organizations in Beijing and Shanghai, highlights the need to build both the capacity of social organizations and the legal framework for GSP including specific supportive fiscal and tax policies (Deng 2009). Wang Chunting, in an overview of both international and mainland scholarship on GSP in China (Wang 2012) concludes that so far service purchasing from social organizations has mainly been concentrated in the more developed eastern and coastal regions. This must be addressed if models of service purchasing from social organizations are to play any real role in the equalization of public service provision and in particular in improving services in rural areas and in less developed regions.
Another body of literature examines the deeper institutional issues underlying GSP models in China. Guan (2015) found there to be both space for social organizations to "embed" themselves into the state but also striking "reverse embedding" of government into society. Guan's study found the majority of social organizations whose services were purchased to have a state background and Guan therefore argues that GSP is in some ways strengthening the "traditional" state-society relationship. However, he still believes that GSP brings new possibilities for reshaping this relationship as it creates both competition in which "pure" social organizations can take part and institutionalized development opportunities.

Development of GSP
This section examines the process of GSP development to date. It demonstrates that GSP in China can be traced back to the 1990s and that 2013 was a key point in its development. It was in this year -following the 18th National Party Congress -that important normative documents began to appear. The introduction of these documents can be viewed as significant road markers in an ongoing process.

Early Explorations, Research, and Local Trials
The earliest experiments in GSP seem to have been in the 1990s. In Shanghai in 1996 the Pudong Social Development Bureau commissioned the Shanghai YMCA to establish the Luoshan Citizens Center (Wu 2003). In 1999, the Luohu District government in Shenzhen purchased environmental sanitation services (Wen 2008). Between 2 Brought to you by | University of Glasgow Library Authenticated Download Date | 2/17/20 1:02 PM the mid-1990s and 2000 examples of practice were to be found scattered around different parts of the country, but none had yet produced a national impact.
A search on Chinese academic database cnki.net for articles using "GSP" (zhengfu goumai fuwu) in the title suggests that the earliest published scholarship on this theme in China appeared in 1999 (Xu 1999). In practice, by the early 2000s, some local government departments had begun to seek a small number of social organizations to cooperate with on a regular or long-term basis. During this stage, local governments were more concerned about the stability of social organizations' participation than the efficiency of purchased services. Shanghai's Pudong government and the Shanghai YMCA formed just such a stable model.
Following their earlier periods of explorations, some local governments, including Guangdong, Shanghai, and Shenzhen, began to experiment with institutionalized and project-based models.
In research, the creative explorations of local governments steadily began to receive increasing attention. In 2001, the Policy Research Office of the Ministry of Civil Affairs (MOCA) -the ministry charged with regulating social organizations -sent a research team to Shanghai to study and publish its findings on the city's practical experience in purchasing elderly care services. After 2001, the number of research papers published annually on GSP in China began to increase, reaching over ten for the first time in 2005.
During this period, theoretically-based research was spreading knowledge of the concept of GSP in China. In 2009, Irish, Salamon, and Simon were commissioned to develop a study on GSP by the MOCA's NGO Management Bureau and China's Representative Office of the World Bank. Their report was studied at key relevant government departments. Following this, at the MOCA's recommendation, these experts collaborated with Professor Wang Puqu to produce China's first book to systemically discuss GSP, summarizing the experience of six Chinese cities and ten other countries (Wang et al. 2010). The work of these scholars gave impetus to increasing interest among Chinese academics, and the process also promoted important dialogue between academia and government. 3 Before 2010, the Ministry of Health, the Ministry of Human Resources and Social Security, and the MOCA had each issued normative documents to encourage the government purchasing of community health services, employment services, and social work services. As more normative documents were issued, the MOCA began to draw the link between GSP and the development of social organizations.
The MOCA was the most active of all government departments in driving the development of GSP. In 2008, its NGO Management Bureau set up two comprehensive and four item-specific local observation stations. These stations were charged with observing the development of social organizations and the trials going on to reform and make innovations in the way social organizations were managed. In 2009, the MOCA used a ministerialprovincial form of agreement to establish local pilot zones for reform (Lan 2012). By evaluating and comparing these observations and pilot zones, departments at the central level were deepening their understanding of how to cultivate social organizations and were finding out more about GSP. Gradually, new reform priorities and goals were taking shape.

A Central-level Project and Departmental Activities
In 2012, the MOCA teamed up with the Ministry of Finance (MOF) to apply for a two hundred-million-yuan special fund from the central treasury and launched the "Treasury Project for Supporting the Participation of Social Organizations in Social Services." The special fund aimed to explore the different potential paths to pursue the idea of social organizations taking on government purchased services; to mobilize the enthusiasm of social organizations for getting involved in GSP; and to spread the idea. 4 At that time the wording "government purchasing of services from social organizations" had not yet been used in any formal normative document at the central level, which is why the project title used "for supporting" social organizations. In an interview, one of the MOCA officials responsible for the project's management explained: When we launched the project in 2012, the thinking about the management of social organizations wasn't as open as it became after the 18th National Party Congress. At the time, a lot of departments, including local bureaus of finance and civil affairs departments, thought this whole thing was odd. In the past the bodies that appeared in the public budgets were all government bodies, public institutions and certain state-owned enterprises, nowhere had anyone used public budgets to give money to social organizations. This was an absolute first. When we were circulating the information about the project, we had calls from lots of localities; they didn't believe it. But now the project's been running for a couple of years, the whole idea and the way of thinking has seen a transformation. It was also like mental preparation for the government issuing documents on GSP. 5 This project's implementation had a powerful effect in spreading the idea of GSP to different localities.

A Flurry of Normative Documents is Released, Practice Spreads, and Research Continues
In 2013 the State Council's General Office issued the "Guiding Opinion on GSP from Social Forces" (hereinafter "2013 Guiding Opinion"). The document's issuance was an important point in the development of GSP. It was a clear message from the top to authorities around the country.
The 2013 Guiding Opinion begins by stressing the need to "Fully recognize the importance of GSP from social forces," and continues to make specific stipulations about six different dimensions of GSP: purchasing entities; undertaking entities; the content of purchasing -what should and should not be purchased, in what ways, and so on; purchasing mechanisms; financial management; and managing performance.
This document began a stage of rapid development in GSP, making 2013 a watershed. Following this, all over the country local governments were undertaking practical explorations and issuing their own normative documents. As practice progressed, the central level released a series of documents designed to address the new issues that were arising during the practical explorations in the localities. Practice and institution building entered a period of rapid growth and the volume of research published soared. As Figure 1 below shows, since 2014, the number of research papers on GSP published per year has been over 1,000.

Observations: The Development of Normative Documents
We combine two lines of inquiry to understand the development of normative documents relating to GSP. The first is to examine the timing, sequence of release, and issues covered in institutional documents. By looking at when pivotal documents were introduced, examining their content, and comparing each newly introduced document with those previously issued, we begin to see patterns and details that reveal something of the nature and thinking behind their development. The second is to use the volume of documents released to examine the phenomenon's development around the country and in different sectors.

Key Normative Documents
With the 2013 Guiding Opinion, there was a marked change in pace. Between 2013 and 2017 a large number of normative documents on GSP were released by different departments. Table 1 contains some of the most important national-level documents that dealt directly with GSP. In addition to documents that directly regulate GSP, there are others that have an important influence on its practice and development. Some have had a strong influence on the further development of normative documents that deal directly with GSP. These include the "Measures for the Implementation of the Government Procurement Law" issued by the State Council in 2015 and the "Opinion on the Reform of the Social Organization Management System and Promotion of the Healthy and Orderly Development of Social Organizations" released jointly by the General Office of the CPC Central Committee and the General Office of the State Council in 2016 (hereinafter "Joint Opinion"). The latter is a powerful document that sketches out with unprecedented clarity at least part of the Party-state's blueprint for China's development of social organizations. Coming as it does, directly from the top, it is essentially a binding document intended to guide development that all relevant Party and state agencies must follow.
An examination of these documents offers clues about the development of GSP in China. First, such documents are used to bring clarity to the meaning implicit in the term "GSP." Before the introduction of normative documents, there were different understandings of GSP, particularly about who could purchase services, from whom, and what kind of services could be purchased. The 2013 Guiding Opinion, titled in full the "Guiding Opinion on Government Purchasing Services from Social Forces," responded to this uncertainty and played an important role in shaping behavior thereafter. It made explicit the official stand that social organizations should be among the entities from which government purchased services.
Through the development of these normative documents, the government is continuously developing and making known the significance of GSP as an institutional innovation. Following the 2013 Guiding Opinion, other departments then quickly moved to issue their own documents, including the "Notice on Issues Regarding Properly Performing GSP Work," the "Notice on Supporting and Standardizing the Undertaking of Government Purchased Services by Social Organizations," the "Notice on Issues in Properly Performing Work Related to the Undertaking of Government Purchased Services by Trade Associations and Chambers of Commerce," and later the "Opinion on Properly Performing Work Related to Public Institution Reform through GSP," and the "Guiding Opinion on Supporting the Cultivation and Development of Social Organizations through GSP." With this great burst of activity, the message being constantly stressed was that GSP is important, and related work must be taken seriously.
Second, emphasized throughout these normative documents is the connection between GSP and the Partystate's drive to "comprehensively deepen reform" including the transformation of the functions of government, the development of social organizations, the reform of trade associations and chambers of commerce, and public institution reform.
The third thing to note is that the issuance and content of these normative documents demonstrates the use of institution building to constantly respond to problems that emerge during practice. After a major and binding normative document like the 2013 Guiding Opinion is issued, naturally there will be problems in the process of promotion and implementation. Looking at the documents that followed, in and after 2013, we can 5 Brought to you by | University of Glasgow Library Authenticated Download Date | 2/17/20 1:02 PM see that as GSP continued in practice, gradually policymakers were reflecting on the issues that were arising and responding through further institutions. We also see hints that as the process continued, the thinking of policymakers was evolving.
Compare for example the "Notice on Supporting and Standardizing the Undertaking of Government Purchased Services by Social Organizations" issued in 2014, and the "Guiding Opinion on Supporting the Cultivation and Development of Social Organizations through GSP" of 2016 (hereinafter "2016 Guiding Opinion"). The names of these two documents tell us that they cover similar areas. But what is also clear is that they adopt a notably different approach. The 2014 Notice stresses "standardization." It addresses the notion of standardizing the practices of social organizations involved in GSP, and focuses on how to ensure that the mechanisms used in GSP develop in a way that conforms with standards. In contrast, the 2016 Guiding Opinion prioritizes the effect that GSP will have on the development of social organizations.
This clearly reflects a critical issue that has emerged as GSP has been put into practice: the relationship between "pushing ahead with the development of GSP" and "the development of social organizations." Through the GSP projects already underway in practice, policymakers came to realize that if the development of China's social organizations continued to be unbalanced and insufficient it would bring obstacles and distortions in the implementation GSP. At this point, we see a shift toward prioritizing social organization capacity building by encouraging them to take on GSP projects. The idea was that by purchasing services, government could "guide" social organizations to strengthen their own capacity, improve their internal governance systems, and improve the technical and specialist skills needed to provide services.
In 2016, the Joint Opinion issued by the general offices of the CPC Central Committee and the State Council, which was itself about promoting the development of social organizations and reforming the way they are managed, stated: for public services related to the public wellbeing, social governance, industry regulation, etc., when different providers meet the same conditions, priority will be given to purchasing from social organizations. 7 Here we can see a clear progression in top level Party-state thinking from 2013. In the State Council's 2013 Guiding Opinion, social organizations had been treated as just one of the different types of "undertaking entities" with no emphasis given to any one type.
When in practice things have begun to go wrong and errors or oversights have become apparent, institutional responses have been quickly put in place to address the problem. The "Notice on Strictly Putting a Stop to Local Governments Engaging in Illegal Fundraising in the Name of GSP" issued by the MOF in 2017 was a direct response to problems occurring in practice. In the 2016 Guiding Opinion, we see policymakers attempting to address the efficiency of the use of public finances, and the quality of service provision under GSP models by stipulating on evaluation: "[Relevant parties should] actively explore and promote third party assessment and give full play to the role of specialist agencies in the process of performance assessment." This began to create space for explorations in different methods of evaluation, which as we show below are an interesting and important part of the continued development of GSP.
Overall, an analysis of the key government and Party documents shows that these institutions are being developed through a process of observing and responding to what is happening in practice.

Normative Documents in Numbers
A search on pkulaw.cn 8 in summer 2017 for documents using "GSP" in the title came up with an enormous number of returns: over 800 central level regulations and judicial interpretations and over 13,000 local level regulations.
By summer 2017, the number of departmental regulations mentioning GSP was already over 600, and almost every government department had issued some form of related normative document.
It is interesting to note the inclusion of mass organizations including the Disabled Persons' Federation, the Communist Youth League, and the All China Women's Federation and their respective chapters as purchasing entities. Ostensibly organizations of the people, they are not part of the government. They are used by the CPC to organize society and connect with different social groups. Today, mass organizations continue to command vast social, political, and economic resources, but they are increasingly unable to play their roles of the past and must change and compete to avoid marginalization and irrelevance (Wang 2015a). These organizations have already begun releasing their own normative documents on GSP and experimenting with GSP in practice as quasi-Party-state purchasers of services. The 2013 Guiding Opinion also includes "mass organizations" in its list of purchasing entities.
Turning to the number of documents released by government departments, discounting quasi-Party-state service purchasing, the MOCA and the MOF have issued the most. See Figure 2  If we look at the number of documents issued by locality, demonstrated in Figure 3, we see that the eastern provinces have produced far more documents than China's other regions, and among them, those that have produced the most are Guangdong, Jiangsu, and Zhejiang. In the western region, the number of such documents issued in Sichuan is noticeably higher than in any other area. 10 From the data above we see that institution building has already spread across the country, with every province issuing its own normative documents. In terms of practice, a broad range of services are already being purchased by local governments from social organizations, including elderly care, services for people with disabilities, social work services, public cultural services, medical and healthcare services, and environmental protection services. Some localities, including Shanghai and Guangdong have begun to use "catalogues for guidance" and "catalogues for implementation" to introduce standards on the services that can be purchased and the scope of purchasing. Others, such as Shenzhen and Nanjing, have experimented with using negative lists to make clear which public services should be provided directly by government and which services it is unsuitable for social forces to provide.
Different levels and departments of government have also begun to look to social organizations to provide them with consultancy services, evaluate the capacity of other social organizations to engage in GSP provision, and engage in service evaluation, training for government officials and Party cadres, and so on, creating a web of channels by which social organizations may influence the development of GSP norms, models, and practices.

Characteristics of the Development Process
In our examination of the data above, we can see the following features that characterize the process of GSP's development in China: 7 Brought to you by | University of Glasgow Library Authenticated Download Date | 2/17/20 1:02 PM

Interplay between Theory, Practice, and Institutions
Initially, scattered instances of practice took place around the country in relative isolation. However, except for during this initial period, academics and experts have played an important role at each stage of the process in spreading the concept and popularizing knowledge of GSP theories. Research by both scholars and government agencies has significantly influenced the design of the central level's agenda.
Once GSP was on the agenda, with the 18th National Party Congress and the 2013 General Opinion, we began to see a large number of normative documents appearing. As these documents were implemented and practice developed, the issues that arose during local experiments created important feedback.
This then fed back into the development process by leading to the adjustment of GSP concepts and even, in some cases, the thinking behind them. The content of normative documents has become more detailed and explicit, with the services covered by GSP being gradually clarified and even listed. We have seen the Party and government's notion of who services should be purchased from evolve, first in the clarification that social organizations are among potential undertaking entities, and second in the explicit statement that they should be given priority.
The process is thus characterized by the constant interplay between the ideas promoted through research, normative documents, and the explorations and trials of different government departments and localities as well as of social organizations themselves.

Interaction, Communication, and Maneuvering between Central and Local, and Different Departments of the Party-State
The experiments of local governments in the more developed regions has promoted and even in some ways directed the development of GSP. The role of different government departments, such as the MOCA, in championing GSP, in advocating different understandings of the concept, and then in directing its development has also been notable. From a different perspective, this can also be understood as the result of imbalances in China's development, with the gaps between regions at different stages of development producing different understandings of GSP, of its feasibility and potential effects. Different departments and agencies of the Party-state are also building on different priorities, understandings, and considerations in the development of their respective normative documents and different trials and projects.

Practical Issues as GSP Continues to Develop
Two issues emerge from the above. The first is that if government is to purchase services from social organizations, social organizations themselves must be able to continue to develop. Whether we view this from the perspective of the state and its own priorities, or whether we take the perspective of the development of a diverse, autonomous, competitive ecosystem of civic organizations, for GSP from social organizations to progress, social organizations must grow and evolve. The second is that if social organizations are to provide quality, efficient services, there must be institutions in place that enable this to happen, and that at present there is space for institutions to continue evolving.
With both issues in mind, some scholar-practitioners have begun to explore ways to use the space created by the introduction of GSP from social organizations. The model of evaluation called "supportive evaluation" is an interesting case in point, exemplifying how this space can be shaped in practice through piloting and constantly refining methods (Ma and Chuanjin 2014;Tao 2016). Evaluation is a key link in the chain of GSP because it helps to determine the very definition of "quality" and "efficient" services, and value for public money. It has the potential to create a more even playing field, and to act as a corrective to problems like that raised by Guan (2015), of the relative ease of social organizations with government backgrounds to secure contracts. Outside China, it has long been recognized that there is no single one-size-fits-all way of effectively evaluating the performance of non-profit organizations and no one concept of non-profit organization effectiveness (Forbes 1998;Lecy, Schmitz, and Swedlund 2012). In China, in different fields, and even in government budgeting, "performance evaluation" and particularly third party evaluation are relatively new. In this context, there is still great potential to shape the way evaluation develops.
In Chinese GSP at present, the model of performance evaluation being used is concerned primarily with outcomes and comparing investments and outputs. This model is based mainly on financial data and project implementation budgets and data. In current practice, it is common for GSP performance evaluation to be based on the number of actual service users, the number of "activities," and the cost of activities. However, seeing the space to improve on this approach, beginning in Beijing, a number of scholarpractitioners have established specialist evaluation organizations to carry out a different model of third party evaluation. The "supportive evaluation" model that they have developed has been championed through academic work and through the social and professional networks of these scholar-practitioners. This in turn has led to similar models being used in other parts of the country, including Shanghai and Chengdu, and a competitive market is developing in specialist evaluation. Supportive evaluation is not unconcerned with the types of data mentioned above. But its advocates believe that good, reliable evaluation cannot rest solely on such data, and that an overemphasis on quantitative data leads to the exclusion of valuable qualitative forms of information. Supportive evaluation has been gradually developed based on the notion that greater attention should be given in evaluation to service processes and to the specialism of the social organization in providing the service.
Supportive evaluation uses case studies and qualitative research methods to examine how social organizations undertake services in practice and how service users use those services. The method pays attention to the details of the process of service provision and attempts to pinpoint certain principles and approaches that reflect the specialist nature of how the social organization provides the service in question. This might be, for example, how a social organization applies social work techniques in services for the elderly, or the approach it uses to avoid discrimination in serving certain users. Supportive evaluation does use quantitative methods, but they are used mainly for random sampling, to examine whether services are in keeping with common principles and approaches.
These supportive evaluation services are themselves contracted by government to evaluate the services it purchases. This brief example demonstrates the space that exists for new approaches to be developed, advocated, taken seriously by the relevant government departments, and create a place for themselves in an emerging market. Taken in the broader context of the development of GSP as a whole, we can see the enormous potential for this space. This is a field that has already developed rapidly and will continue to do so over the coming years, particularly with improvements in efficiency and quality of service provision and the equalization of public services now priorities for the central government. The institutions that shape the field are themselves being shaped by a combination of ideas and practice. How these ideas are developed and the experience gained in practice is understood will continue to play an important role in influencing the development of this field, and merit further research.

Notes
1 Normative documents include institutional documents, like laws, measures, administrative regulations, and departmental regulations, but also "notices" and "opinions" and so on. Those normative documents which are not forms of legislation are an extremely important communicative device in China's political system, and in practice have long been as, if not more, important than laws themselves (Shi 1997). 2 Public institutions are a unique part of the Chinese system of socialism. Originally formed to act as the 'public service arm' (Simon and Snape 2017, 27) of the government following the establishment of the PRC these institutions have intimate and tough-to-break links to government. Their overbearing ability to command resources means that their reform is crucial to the development of the competitive non-profit market needed for GSP.