From quasi‐markets to public–private networks: Employers' engagement in public employment services

This article explores the implications of creating a role for private‐sector partners in public employment services (PES), rather than creating quasi‐markets. It focuses on how the engagement of employers in public–private networks with local government can enhance employment opportunities for disadvantaged welfare recipients but may require a further shift in local public services. The theory relates to contractual arrangements versus network modes of public–private partnerships. Based on surveys among employers and welfare recipients, and interviews with politicians, managers, and frontline workers in five Dutch municipalities, the article provides detailed evidence on innovative and promising cases of public–private networks in employment services. It shows that, under certain conditions, vulnerable jobseekers are better served by a network involving employers than by the standard supply‐driven approach that predominates in quasi‐markets. It also reveals that public and private partners have yet to fully embrace the implications of the network approach for their respective roles. The article contributes to the theoretical debate on public–private partnerships in the context of PES, reflecting on public–private networks as a policy design that could help improve employment opportunities for disadvantaged jobseekers.     

Is Contracting out of Public Services still the Great Panacea? A Systematic Review of Studies on Economic and Quality Effects from 2000 to 2014

This article presents the results of a systematic review of international studies on economic and quality effects of contracting out published in the period from 2000 to 2014. We conducted a comprehensive search of the literature and identified 49 relevant studies. There are three main findings of the systematic review: (1) cost savings documented in international contracting out literature have been decreasing over time; (2) cost savings have been much greater in technical services than in social services; and (3) economic effects have been twice as large in Anglo‐Saxon countries compared with other countries. With regard to measuring the effect of contracting out on service quality, which is a vital component of any service delivery arrangement, very few studies assess this issue in a comprehensive manner. There is also a significant lack of studies that include measures of transaction costs, thereby making it difficult to evaluate the impact of contracting out on overall cost‐effectiveness of public service delivery. We conclude that generalization of effects from contracting out should be made with caution and are likely to depend, among other things, on the transaction costs characteristics of the service, the market situation and the institutional/regulatory setting.     

Supplemental home care and topping‐up: A shift from service universalism towards a new and privatised public service model?

How does a public service model based on service universalism react to the introduction of market principles of topping up? In a recent so‐called Free Municipality Scheme (an experimental scheme that allowed for greater operational autonomy locally in an effort to reduce state bureaucracy), a number of Danish municipalities were for the first time ever allowed to compete with for‐profit providers of home care in selling supplemental home care services paid entirely by the user. The take‐home message from this experience is that the introduction of supplemental home care entails challenges and eventually wider implications for the public service model, on an economic, organisational and cultural level. Supplemental services represent a new and potentially powerful combination of market and state logics that eventually redirects away from the universalist welfare state and towards a new and increasingly privatised public service model – a model where the service level is determined by the user's capacity to purchase and pay for services. The introduction of such services therefore implies a change of the potential of the Nordic welfare state to ensure equal access regardless of class and income.     

The Role of Non‐profit Organizations in the Mixed Economy of Welfare‐to‐Work in the UK and Australia

This article charts the development of welfare‐to‐work policies and compares and contrasts the traditions of delivery in the UK and Australia. We find that in the UK, employment services and social security benefit administration have been dominated by the central state, traditionally affording a key role to civil servants as direct delivery agents. However, in federal Australia, mixed economies of welfare‐to‐work operate in the different states, there is a far greater role for social services and non‐profit organizations are firmly established as key providers of frontline employment services. Since the late 1990s, UK welfare reforms have been gradually following the Australian lead in contracting non‐state actors as delivery agents. As this trend seems set to continue and intensify, we examine the Australian experience in order to reflect on the role of non‐profits in policy reform.     

Migrant Care Work Going Dutch? The Emergence of a Live‐in Migrant Care Market and the Restructuring of the Dutch Long‐term Care System

In recent years, a live‐in migrant care (LIMC) market has emerged in European countries with specific care, migration, and employment regime features. In countries with relatively low levels of formal long‐term care (LTC) provision, people in need of care and their families have started purchasing LTC directly from individual – mostly migrant – workers who live‐in with the person in need of care. Previous research has shown that this arrangement is facilitated by the availability of cash‐for‐care benefits that can be freely used by the beneficiaries, and/or by low levels of regulation of employment and migration. The Netherlands traditionally features strong, universal and generous LTC policies. However, recently, the phenomenon of LIMC has also appeared there. Based on exploratory qualitative research, this article examines the features of Dutch LIMC and the factors that foster or hinder its development. Our findings show that the ongoing restructuring of the Dutch LTC system – particularly the emphasis on informal care and decreasing accessibility of institutional care – are important factors pushing an LIMC market. At the same time, various institutional factors limit its growth, particularly the high levels of regulation of the Dutch care, migration and employment regimes. Further cutbacks in the care sector might push more families to this market in the near future, and change the character of the Dutch LTC sector. The Dutch case is relevant for other countries with longstanding traditions of generous LTC services which currently undergo retrenchment, and sheds light on routes to institutional change.     

Reducing unemployment? Examining the interplay between active labour market policies

Active labour market policies (ALMP) are important tools that welfare states utilize to influence the labour market. This study analyses the macroeconomic effects of different types of ALMP spending on aggregate unemployment rates, and especially if there is evidence of interdependencies between policies. The types of policies scrutinized are public employment services (PES), training programs, public job creation and subsidized employment, where the PES is singled out as a crucial factor that moderates the effects of other types of labour market programs. The study examines 19 welfare states between 1985 and 2013, using error correction modelling to separate between short‐ and long‐term effects. The results indicate that PES, training and subsidized employment reduce unemployment in the short‐run, whereas PES and wage subsidies are associated with reduced unemployment when considering long‐term effects. However, PES is found to have indirect effects on other policy types and increased spending on PES is shown to reinforce long‐term effects of training programs.     

The new privatized market: A question of ideology or pragmatism within the Swedish addiction treatment system?

Given its traditions of universal welfarism and social democracy, Sweden had already scored unexpectedly high on New Public Management by the 1980s. Health and welfare services remain primarily tax‐funded, but the production of care is increasingly transferred to a competitive quasi‐market. To what extent can this development be understood in terms of right‐wing governments, and to what extent in terms of other, socioeconomic and pragmatic factors? We examined this question through official statistics on providers of institutional addiction care since 1976, and through the total expenditure and purchases by local‐level municipal social services of interventions for substance users in Sweden in 1999, 2004, 2009, and 2014. We have analyzed the distribution across public and private providers within the addiction treatment system, and whether national developments and local differences across the 290 municipalities—which bear the major treatment responsibility—can be understood in terms of local‐level political majority, population size, and local wealth. The share of purchased services has remained stable, but the treatment system shows increasing financial turnover and an increasing share of for‐profit providers among producers of purchased care, especially in outpatient treatment. While venture capital enterprises emerged as a new actor, non‐governmental organizations lost out in importance. Bourgeois government correlated with larger shares of purchasing and purchases from for‐profit providers. However, purchasing on a market dominated by for‐profit providers has also become the “new normal”, regardless of ideology, and recent years have shown a reversed effect of left‐wing municipalities purchasing more services than right‐wing governments. Pragmatic reasons also influence local‐level purchasing.     

Is Sweden Being Torn Apart? Privatization and Old and New Patterns of Welfare State Support

This article examines the potential impact of institutional change on popular welfare support. The encompassing welfare state of Sweden provides an interesting case where the privatization of social service delivery has been widespread over the last decades. We use survey data from five rounds of the Swedish Welfare State Survey (1992, 1997, 2002, 2006 and 2010) in order to study how public preferences for the financing and organization of welfare services have changed over time. Based on a theory describing an ideal‐typical pattern of public support for an encompassing welfare model, we derive three types of public preferences: support for a pure state model, a pure market model and a mixed model (welfare services are funded by taxes but provided by private firms). We begin by tracking the development of these ideal‐typical attitude patterns between 1992 and 2010. We then investigate how preference patterns vary across municipalities displaying different degrees of privatization of social service delivery. Our results show that welfare support among Swedes over the last decades is better characterized as dynamic rather than stable. Swedes seem to take an overall more ideologically based position on the role of the welfare state over time. The share of respondents expressing such ideologically based preferences has increased from 54 per cent in 1992 to 78 per cent in 2010. This change is principally manifested in increased support for the state and mixed models. This trend seems to be parallel to the increasing share of private welfare service providers over the last decade. We also find a link between the municipal degree of privatization and support for our three ideal‐typical welfare models. Public support for a mixed welfare model and, to some extent, a market model, is comparatively stronger in municipalities where welfare services to a large extent are carried out by private actors. Conversely, data shows that public support for the traditional Swedish state model is more widespread in municipalities having a low degree of welfare services privatization. Lastly, we discuss some theoretical implications of our findings.     

Towards the Disintegration of Child Welfare Services

This paper examines market issues in the provision of children's services in the light of the changing role and practice of local authorities contracting for welfare services. In adult services, where there has been a legal requirement to reorganize on market lines, the services have had to modify some of their earlier contracting practices to take account of the complex requirements of health and welfare services and it is argued that relational contracting offers a more appropriate paradigm for these. Following the implementation of the Children Act 1989, although not a requirement of the Act, many of the organizational systems in relation to markets, originally developed for adult services, have been adopted for children's services. Two areas of services for children, day care and fostering services, are discussed in order to demonstrate that these contracting systems are inappropriate and often dysfunctional for the children concerned. It is argued that there is a widening gap between contracting systems in adult and children's services which needs to be addressed. In general, it is concluded that the philosophies of the market place are flawed when applied to children's services.     

Public Opinion against Markets? Attitudes towards Market Distribution of Social Services – A Comparison of 17 Countries

This article studies how citizens view the appropriateness of market criteria for allocating services commonly associated with social citizenship rights and welfare state responsibility. The article focuses specifically on a potential role for the market in the provision of social services. The relationship between welfare policy institutions, socio‐economic class and attitudes is explored by comparing attitudes across 17 countries of the Organisation for Economic Co‐operation and Development, using multilevel modelling and data from the 2009 International Social Survey Programme. Results show that public support for market distribution of services is relatively weak in most countries, a result suggesting that public opinion is unlikely to pose a driving force within ongoing processes of welfare marketization. Still, attitudes are found to vary a lot across countries in tandem with between‐country variation in welfare policy design. First, aggregate public support for market distribution of services is stronger in countries with more private spending on services. Second, class differences in attitudes are larger in countries with more extensive state‐led delivery of services. Together, these results point to the operation of normative feedback‐effects flowing from existing welfare policy arrangements. The theoretical arguments and the empirical results presented in this article suggest that future research exploring the relationship between welfare policy and public opinion from a country‐comparative perspective is well advised to place greater focus on the market institutions that, to varying extents in different countries, act as complements to the state in the administration of social welfare.     

Prioritising care services: Do the oldest users lose out?

Population ageing is a major concern in most European countries. Demands for health‐ and care services will increase, as older people typically have a higher need for such services. What is often overlooked, however, is that older users increasingly compete with younger users for the same limited care resources. We ask: How do employees in the Norwegian care sector make decisions regarding the allocation of services to younger and older users? To answer this question, we interviewed decision‐makers in Norwegian municipalities. Despite providing for equal rights to services, laws allow for an interpretation of needs and this can result in the unequal distribution of services. Our study indicates that needs are defined differently for younger and older users, which affects the amount, type and content of the services allocated to younger and older people. When resources are scarce and priorities must be established, the services to the oldest suffer. Key Practitioner Message: ● The article lays the groundwork for an open debate about the allocation of resources to users in different life phases; ● The analysis conceptualises and makes explicit important normative decisions made by practitioners.     

The "Employment-first" Welfare State: Lessons from the New Deal for Young People

New Labour is constructing an “employment‐first” welfare state. It plans through Jobcentre Plus to transform the passive culture of the benefit system by creating more explicit links between individual behaviour and engagement with labour market programmes. The New Deal for Young People (NDYP) has been at the forefront of these changes. This paper reports on the findings from four case studies that explored how the NDYP has changed young people's experience of the welfare state. It establishes that NDYP offers a mixture of employment assistance and “pressure” and has made progress in developing front‐line services and helping young long‐term unemployed people into work. NDYP does not, however, work for all. In areas of high unemployment and for some disadvantaged groups intermediate labour markets could enhance the New Deal and make real the offer of “employment opportunities for all”.     

New Models of Contracting in the Public Sector: A Review of Alliance Contracting,Prime Contracting and Outcome‐based Contracting Literature

The coordination of public services is an enduring challenge and an important policy priority. One way to achieve collaboration across organizational boundaries, which is being considered in public services such as the English National Health Service (NHS), is through the adoption of alliance contracting, prime provider contracting and outcome‐based contracting. This article reviews the cross‐sectoral literature concerning the characteristics of these new contractual models, how they function, their impact, and their relation to public sector governance objectives. These new contractual forms are characterized as models which, in line with the New Public Management (NPM)/post‐NPM agenda, seek to incentivize providers through the transfer of risk from the commissioners to the providers of services. Key findings are that the models are likely to incur high transaction costs relating to the negotiation and specification of outcomes and rely heavily on the relational aspects of contracting. There is also found to be a lack of convincing cross‐sectoral evidence of the impact of the models, particularly in relation to improving coordination across organizations. The article questions the reconciliation of the use of these new contractual models in settings such as the English NHS with the requirements of public sector governance for transparency and accountability. The models serve to highlight the problems inherent in the NPM/post‐NPM agenda of the transfer of risk away from commissioners of services in terms of transparency and accountability.     

Activation Reform and Inter‐Agency Co‐operation – Local Consequences of Mixed Modes of Governance in Sweden

Organizational reform has become a recurring solution to problems of social exclusion and unemployment. In Europe, and other parts of the world, there is a trend towards policies of ‘activation’ in employment and social policy. The idea of flexible, individualized and tailor‐made services is coupled with managerial and market‐based reforms as well as collaborative governance. In these complex structures of service provision, coordination and inter‐agency co‐operation have become key concerns. Based on a study of a recent reform of programmes for newly arrived refugees in Sweden (Etableringsreformen), this article seeks to contribute to the literature on governance of ‘activation’ by examining the consequences of mixed modes of governance (market and collaborative) on local inter‐agency co‐operation. Drawing on data from in‐depth case studies in two municipalities, it is demonstrated how the coupling of managerial practices and quasi‐markets with existing collaborative arrangements has created barriers for inter‐agency co‐operation. The results indicate that institutional tensions between governance forms represent an important factor for explaining governance failure in this policy area.     

Can Quasi‐market and Multi‐level Governance Co‐exist? Insights from the Case of Lombardy's Employment Services System

This article explores the functioning of Lombardy's networked employment services system, inspired by quasi‐market and horizontal subsidiarity principles, and specifically addresses a gap in the quasi‐market literature, where little attention is devoted to the role played by institutions at lower levels of government. A qualitative study of the Lombardy system, with a focus on the municipality of Milan, is relied upon in order to explore the extent to which the principles of quasi‐market and multi‐level governance pursued by the regional government are allowed to co‐exist in practice. Here, sub‐regional levels of government are directly involved in services provision, but enjoy a more privileged condition relative to the private providers, thereby jeopardizing the implementation of an effective quasi‐market. The article contributes to existing theories by suggesting that horizontal subsidiarity and marketization cannot neglect multi‐level governance in those sectors where public bodies at various levels of government are directly involved in implementation.     

The ambiguity of social return policies in the Netherlands

Social procurement policies, which aim to create employment opportunities for vulnerable groups, such as the long‐term unemployed and the disabled, have become increasingly popular in recent years. Despite their growing popularity, empirical research on this topic is limited. Combining insights from the social policy and public administration literatures, we explore the development and implementation of “social return” policies by the Dutch government. These policies are a form of social procurement that require private employers to spend a percentage of public tenders to hire individuals far removed from the labor market. Social procurement appears, by definition, to be a form of social investment. However, our analysis of the ideas underlying its use in the Netherlands suggests that significant contradictions exist, with evidence of neoliberal New Public Management tendencies, social investment, and the more recent form of public administration, New Public Service. Using extensive document analysis of parliamentary documents, discussions and evaluative reports from 2008 to 2014, we reveal the tensions inherent in the Dutch approach and discuss possible implications for our understanding of social policy and administration as well as social protection.     

The impact of quasi-markets on processes and factors affecting the costs of contracting

The aim of this paper is to ascertain the impact of quasi-markets on contracting processes and factors affecting the costs of contracting in Finnish health care in the specific case of laboratory services. By means of a comparative case analysis, we ascertained the changes in organizational contracting practices and identified the actions affecting the transaction costs of contracting in the case of an autonomous municipal enterprise laboratory compared with the same laboratory as a hierarchically run municipal unit. The research was conducted during the years 2007–2011. The results suggest that introducing quasi-markets into laboratory services increased the cost factors of contracting; and had a negative impact on the laboratories’ willingness to create new market relationships.     

Market stewardship of quasi‐markets by street level bureaucrats: The role of local area coordinators in the Australian personalisation system

With the rise in popularity of market‐based responses to social policy challenges, the stewardship of quasi‐markets or public service markets, is a key concern for governments worldwide. Debates about how to manage quasi‐markets have focussed on high‐level decision‐making processes. However local actors, in particular street level bureaucrats, are a key part of the complex work of managing quasi‐markets. We examine how street level bureaucrats act as local market stewards in a new quasi‐market for disability care, the Australian National Disability Insurance scheme. We find that the street level bureaucrats, known as local area coordinators, act as shapers of local markets but that their contributions are informal and often restricted by formal structures and processes. For example, we found evidence that the use of key performance indicators can disrupt effective local stewardship efforts towards a procedural approach. We conclude that introducing principles of the polycentric governance approach can improve connections between local market knowledge holders and central decision‐making agencies, thereby improving market stewardship and outcomes.     

Assisting ex-offenders in employment: the experience of Hong Kong

Research indicates that employment is effective in reducing recidivism amongst ex-offenders. However, ex-offenders are also discouraged from obtaining employment as a result of their poor education level, deficits in vocational skills and employer bias and discrimination. In Hong Kong, the Society of Rehabilitation and Crime Prevention offers a wide range of services to assist ex-offenders in employment. While a number of ex-offenders have benefited from these services, continuing difficulties are hard to overcome without government support. This paper recommends a multi-disciplinary approach to improve the employment situation of ex-offenders in Hong Kong and advocates for greater government involvement to help facilitate the reintegration of ex-offenders into the community in Hong Kong.     

Cash‐for‐care policy in Sweden: An appraisal of its consequences on female employment

In 2008, Sweden introduced a cash‐for‐care benefit consisting of a flat‐rate sum paid by municipalities to parents whose children were between the ages of one and three and who did not use publicly subsidised childcare. The main object of the reform was to increase parents’ ‘freedom to choose’, but the policy was criticised because of its potentially negative effects on gender equality and mothers’ employment. This study focuses on the effects of cash‐for‐care on female employment in Sweden. The study shows that the adoption of this policy had negative effects on female employment, although primarily in rural areas. Cash‐for‐care was abolished in Sweden in 2016. To evaluate the effects that the policy had on female employment during the time it was in place is important as it indicates what may happen if the policy is introduced again.