Marketization and Economic Performance

Morten Balle Hansen

Public Management Review, 2010, vol. 12, issue 2, 255-274

Abstract: The public management reforms of the past three decades have been characterized by organizational innovations usually associated with New Public Management (NPM) and reinventing government. In particular, neoliberal ideas of strengthening market mechanisms in the public sector have been prominent. In the empirical literature focusing on the consequences of marketization, most studies have examined technical services such as refuse collection while very few have focused on the social sector. In this article, an example of the general trend towards marketization conducted within the social sector is analysed. A reform enforcing compulsory competitive tendering in homecare for elderly people in Denmark is analysed and its relation to measures of economic performance is explored. Two competing models of marketization are contrasted in the analysis: a problem solving model inspired by public choice ideology, in which marketization processes are seen as driven by work-related concerns for efficiency and performance, and a macro phenomenological institutional model, in which innovation processes are seen as driven by factors related to hegemonic ideologies, legitimacy concerns and coercive enforcement. Very little impact on economic performance is found, which lends support to an institutional interpretation of the findings.

Date: 2010
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DOI: 10.1080/14719031003616644

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