Revisiting Marketization in the Public Sector
The integration of a variety of market-based institutions and mechanisms in public service delivery, or what with a shorthand-term can be referred to as āmarketizationā, represent one of the most profound doctrines in the global reform waves reshaping the public sector since the 1980s (Christensen and LƦgreid 2011; Pollitt and Bouckaert 2011). Marketization has in particular become known by a set of institutionalized arrangements or mechanisms grounded in ideas of choice and competition in combination with private sector involvement for reshaping, respectively, the demand and supply sides in public service delivery (Le Grand 2007). Well-known mechanisms include, among others, competitive tendering, contracting out , user choice and purchaserāprovider models.
The broader subject of this book is the diffusion and evolution of marketization in the public sector since the early 1980s and until the mid-2010s and its implications for management, organization and performance of public service delivery. In the book we deliver a comparative exploratory analysis of marketization based on a series of cross-sectional and longitudinal-historical analyses at the level of local governments in England and the three Scandinavian countries within park and road servicesātwo spearhead services in marketization efforts from the late 1980s and until the mid-2010s. The book provides unique and novel insights into how key mechanisms and institutions of marketization, such as contracts and competition, have evolved and diffused within and across our four countries as well as implications for management, organization and performance in public service delivery. While the primary focus is at local government , the book adopts a multilevel strategy and integrates three perspectives on marketization as (1) a globally supported approach to governance; (2) a nationally framed reform strategy and (3) locally evolving practices of marketization characterized by learning and evolution.
With point of departure in our specific research setting, the book contributes to our understanding of the impacts on public service delivery from globally promoted ideas and models for reforms through a concerted effort to evaluate the legacy of the last four decades of marketization at the level of local governments . In perspective, the book asks us to reconsider what and how we think about marketization, as a set of ideas and models for organizing public service delivery , by illuminating how marketization has changed public service delivery and illuminating how marketization itself has been changed during its implementation.
First Impressions, Second Thoughts
Our bookās principal research aim is to examine whether our inherited theoretical and conceptual landscape for getting to terms with marketization fits with the contemporary use of marketization in public service delivery at the municipal level of local governments . In other words, our book questions whether we can rely safely on the conventional ideas , models , concepts and the wider understanding of marketization established in the heydays of the new public management (NPM) reform wave which introduced marketization as a reform doctrine in the 1980s and 1990s or whether we need to revise our thinking and understanding in concordance with later and more recent developments in reforms and practices.
Traditionally most of the literature on marketization situates it as an integrated part of the NPMāa marriage of several reform doctrines originating in disparate theories and ideas on how to improve the public sector (Hood 1991). We suggest that the key organizing principles in the NPM version of marketization can be characterized by a combination of moves toward, respectively, (1) a strategic focus on economic objectives (e.g. cost-reductions and cost-effectiveness), (2) structural devolution of responsibilities with emphasis on horizontal and vertical specialization within and across organizations (e.g. single-purpose organizations, internal and external contracting models such as purchaserāprovider models and contracting out ), and (3) market-based coordination of activities based on ideas of price-based competition and choice mechanisms (e.g. benchmarking, competitive tendering and free choice of service provider).
In a global context, the initial introduction of marketization as a reform doctrine belonged to a historical epoch where neoliberalism (and its neoconservative sibling) and its re-orientation of society toward the individual, markets, competition and private ownership, was forceful in its intellectual vitality and critique of the consensus on the importance of the welfare state and Neo-Keynesian economic policies established in Western Europe in the post WWII era. Political leaders, such as Margaret Thatcher in the UK, could lead and implement major reform agendas based on neoliberal and neoconservative thoughts with strong popular support (Evans 2013; McAllister and Studlar 1989). Given the novelty of the NPM reform agenda it was also largely unfettered from any past experience and evidence which could stain its bright promises or guide its implementation. Four decades of experience have changed this situation and provided an evidence base for systematic evaluations of the merits and perils of the NPM (Hood and Dixon 2015).
A prominent account in the academic literature on the marketization of the public sector takes point of departure in marketization as a set of uniform institutional arrangements, such as contracting out or user choice, that through successive reform waves have been disseminated in various degrees across different groups of countriesāor what Pollitt and Bouckaert (2011) describes as āhouses of reformā. In this account, marketization formed a key part of the NPM reforms firstly implemented through radical and wide-ranging approaches from the early 1980s and onward in a group of early ācoreā reform countries notably made up by Anglo-Saxon countries. The reforms were at this stage legitimized and pursued at the backdrop of the global economic crisis of the 1970s, increasing problems with financing and managing the expanding system of services provided by the welfare state, and emerging neoliberal critiques of the welfare state and stateāsociety relations more generally. Following the core reform countries, marketization also became a part of public sector reforms implemented through more incremental and limited approaches within different groups of countries at the European continent.
Much has happened since the heydays of NPM and neoliberal reform politics and in a critical view it can be argued that conventional ideas and models of marketization increasingly are becoming obsolete as contemporary reform doctrines and principles for organizing public service delivery. With the diffusion and widespread use of marketization across the OECD countries since the 1980s it can be argued that contemporary issues have become less about the marketization of the public sector and more about how to make reforms within an already marketized public sector. Together with the NPM, marketization can be said to have entered an age of surprises, paradoxes, the unexpected and discontinuity (Hood and Peters 2004). With a shift in focus from marketization as a path for reform of the public sector to reform within an already marketized public sector, the idea of marketization as a reform path can be argued to have become increasingly outdated.
These first impressions could lead to the overall conclusion that the main story of marketization as a path for reform is already written and relatively little new can be added. History is merel...