Measures, Public Private Partnerships and Benchmarking
Edited by Jaap de Koning
Chapter 7: Contracting-out the Public Employment Service: A New Institutional Economics Perspective
7. Contracting-out the public employment service: a new institutional economics perspective* Oliver Bruttel 1 INTRODUCTION The reform of public organisations and the welfare state in general following the paradigm of New Public Management is not a new development. Public management reform as applied to the welfare state takes many diﬀerent forms, ranging from organizational reforms, such as decentralization and contracting-out, to more fundamental policy shifts, such as the privatization of social security. These reforms have to be seen in the context of changing perceptions of public bureaucracies, with the positive virtues of state planning and stability giving way to rather negative connotations of ineﬃciency and inﬂexibility (Le Grand, 2003). While much international research has been devoted to the eﬀectiveness of active labour market policy measures (eg vocational training), the organizational reform of the Public Employment Service (PES) itself has largely been neglected, even though in recent years there has been growing interest (Considine, 2001; Sol and Westerveld, 2005). The Public Employment Service has two dominant functions: ﬁrst, the administration of unemployment beneﬁts and second, the placement of job seekers (which includes implementing active labour market policy measures). The recent New Public Management reforms are generally associated with the second task, the provision of public placement, or more broadly, employment, services. While older strategies favour internal reforms following the Management by Objectives paradigm, more recent reforms seem to follow the external reform option of contracting-out services. In this chapter we will consider Australia, the Netherlands and...
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