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ISSN 0144-333X
Volume 27 Number 7/8 2007
International Journal of
Sociology and Social Policy New modes of governance in activation policies: 1 Guest Editors: Dr Rik van Berkel and Professor Vando Borghi
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International Journal of Sociology and Social Policy
ISSN 0144-333X Volume 27 Number 7/8 2007
New modes of governance in activation policies: 1 Guest Editors Dr Rik van Berkel and Professor Vando Borghi
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Editorial advisory board___________________________
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EDITORIAL New modes of governance in activation policies Rik van Berkel and Vando Borghi _________________________________
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Implementing public employment policy: what happens when non-public agencies take over? Thomas Bredgaard and Flemming Larsen __________________________
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The individual job seeker in the sphere of contractualism Els Sol and Mies Westerveld _____________________________________
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Emergence of new modes of governance in activation policies: Czech experience Toma´sˇ Sirova´tka, Pavel Hora´k and Marke´ta Hora´kova´ ________________
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CONTENTS
CONTENTS continued
Changing modes of governance in activation policies in France and The Netherlands: common path or countermodel? Nicolette van Gestel and Jean-Michel Herbillon _______________________
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Re-activating the Nordic welfare states: do we find a distinct universalistic model? Ha˚kan Johansson and Bjørn Hvinden ______________________________
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EDITORIAL ADVISORY BOARD
Benjamin P. Bowser Professor of Sociology and Social Services, California State University, East Bay, USA
Professor Enzo Mingione Professor of Sociology and Dean of Faculty of Sociology, University of Milano-Bicocca, Italy
Professor Timothy Dowd Associate Professor, Department of Sociology, Emory University, USA
Professor Zdravko Mlinar Emeritus Professor of Sociology, University of Ljubljana, Slovenia
Professor John E.T. Eldridge Department of Sociology, Anthropology and Applied Social Sciences, University of Glasgow, Glasgow, UK
Professor Else Øyen Scientific Director of Comparative Research Programme on Poverty (CROP), Norway
Hsin-Huang Michael Hsiao Executive Director, Center for Asia-Pacific Area Studies (CAPAS), Taiwan Professor Ron Jacobs Associate Professor and Director of Graduate Studies, Department of Sociology, Arts and Sciences, State University of New York, USA Dr Lisa A. Keister Department of Sociology, Ohio State University, USA Professor Enrico Marcelli Department of Economics, University of Massachusetts, Boston, UK
International Journal of Sociology and Social Policy Vol. 27 No. 8/9, 2007 p. 276 # Emerald Group Publishing Limited 0144-333X
Professor Dr Birgit Pfau-Effinger Institut fu¨r Soziologie, University of Hamburg, Germany Professor Gianfranco Poggi Universita` di Trento, Italy Dr John Round School of Geographical Sciences, University of Birmingham, UK Dr Jan Windebank Department of French, University of Sheffield, UK Dr Richard White Faculty of Development and Society, Sheffield Hallam University, UK
The current issue and full text archive of this journal is available at www.emeraldinsight.com/0144-333X.htm
EDITORIAL
New modes of governance in activation policies Rik van Berkel
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Department of Interdisciplinary Social Science, Utrecht University, Utrecht, The Netherlands, and
Vando Borghi Department of Sociology, University of Bologna, Bologna, Italy Abstract Purpose – This editorial aims to introduce the first of a set of two special issues on New modes of governance in activation policies. Design/methodology/approach – The article explores the concept of governance, distinguishing a broad and more narrow use of the concept. Then, it argues that issues of governance should be an integral part of studies of welfare state transformations. Not in the last instance, because governance reforms do have an impact on the content of social policies and social services such as activation. The article continues by discussing three models of the provision of social services. Findings – The article states that the development of the modes of governance in activation in various countries reveals that a mix of service provision models is being used. Originality/value – The article introduces the articles of the special issue. Keywords Governance, Social welfare administration Paper type Viewpoint
Introduction This and the next issue of the International Journal of Sociology and Social Policy will discuss and analyse the introduction of new modes of governance in activation or reintegration policies. Nowadays, the concept of ‘‘governance’’ is widely used by social scientists coming from a variety of social scientific disciplines and sub-disciplines: google scholar produces hundreds of thousands of hits when searching for governance. One could explain this by arguing that social scientists are flexible in adapting their concepts to the changing jargon of policy makers and politicians, or to the priorities of research councils and other organisations that fund research programmes. In addition, the work of many social scientists has itself been subjected to the introduction of new modes of governance, making competing for limited resources, and continuously refocusing or reframing research interests into a common practice. Nevertheless, there are also more substantial arguments for explaining the appeal of the concept of governance. Reforming governance has become part and parcel of the strategies that governments develop to cope with processes of societal change, and is therefore an obvious object of research. Furthermore, the social sciences are themselves challenged to develop new theories and concepts to interpret and explain the changing social reality they are investigating. As Bob Jessop wrote: ‘‘Not only has the taken-forgrantedness of national economies, national states, and national societies as units of analysis been challenged by the dialectic of globalization-regionalization but conventional conceptual couplets (such as market vs plan, state vs civil society, bourgeois vs citoyen) also appear less relevant. ‘Governance’ is being introduced to bridge disciplines and to provide alternative ways of understanding ( . . . )’’; in other words, it is ‘‘a response to paradigm crises in the social sciences’’ (Jessop, 2004, p. 144).
International Journal of Sociology and Social Policy Vol. 27 No. 7/8, 2007 pp. 277-286 # Emerald Group Publishing Limited 0144-333X DOI 10.1108/01443330710773854
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As was mentioned before, our attention here will be focused on one specific area of social policies, activation policies. First of all, because the introduction of these policies and their integration with income protection schemes is one of the main strategies governments adopt to adjust welfare states to new social, economic, and demographic conditions; and secondly, because activation policies are a social policy area with a clear ‘‘new governance profile’’. Obviously, other social policy areas – especially those involving social services, such as child care, health care, welfare services, elderly care – have witnessed the introduction of new modes of governance as well; and we hope that researchers of these policy areas will find our analysis of activation useful as well. In terms of its definition, the concept of governance is used in multiple ways in social scientific publications on activation policies; and this is reflected in the ways in which the authors of the articles in this and the next issue of this journal refer to governance. Although we do not intend to elaborate the concept in any detail here, it might be useful to make a distinction between two general applications of the concept in the context of social policy analysis. First, a broad definition of the concept of governance can be distinguished. Here, it refers to the ways in which (international, national, regional, or local) governments reconsider their strategies to deal with social issues such as unemployment, old age, disability, sickness, or poverty as a response to what are usually referred to as processes of modernisation, such as globalisation and international competition, socioeconomic and demographic changes, processes of individualisation, etcetera. In this perspective, activation is itself a ‘‘new mode of governance’’: making welfare states ‘‘activating’’ is the core objective of the transformation processes social policies are going through in most – more or less ‘‘developed’’ – welfare states. Despite the cross-national variety of these transformation processes, some general tendencies may be observed that seem to characterise these processes in many countries (see, among others, Lødemel and Trickey, 2001; van Berkel and Hornemann Møller, 2002; Gilbert, 2002; Handler, 2004; Serrano Pascual, 2004; van Berkel and Valkenburg, 2007): .
a redefinition of the social issues mentioned before in terms of a lack of participation (mainly, though not exclusively, in the labour market) rather than a lack of income;
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a greater emphasis on citizens’ individual responsibilities and obligations in preventing social problems or solving them;
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an enlargement of the target groups of activation, including sick people, the handicapped, older people, highly vulnerable groups, single parents;
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an integration of income protection schemes and labour-market or activation programmes, where entitlements to the former are made dependent on participation in the latter;
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an individualisation of social interventions aimed at promoting participation.
Secondly, governance is used in a more narrow sense. In the context of social policies, it then refers not so much to the ‘‘what’’ of social policies and social policy reforms, but rather to the ‘‘how’’ of policy making and policy implementation processes, i.e. the administration of income protection schemes and the provision of social services, including activation services. Here, the focus is not on the content of policy schemes and programmes, but on the institutions and actors – and their relationships – involved in policy making and policy delivery. In this context, we can refer to (see, among others,
Carmel and Papadopoulos, 2003; Struyven and Steurs, 2005; Sol and Westerveld, 2005; Bredgaard and Larsen, 2005; van Berkel and Borghi, forthcoming): . processes of internationalisation, which increase the role of international actors in national policy making. In the context of activation policies, one can think of the EU (for example, the European Employment Strategy or the Broad Economic Policy Guidelines) and its impact on national policies, but also of the OECD, the World Bank or the IMF; . processes of decentralisation, in which policy making powers and policy responsibilities are devolved from national to regional and local authorities; .
processes of promoting inter-agency cooperation, for example, cooperation between – or integration of – agencies involved in the administration of income protection schemes and the provision of activation, reintegration, and labour-market services;
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processes of marketisation, which separate the purchasers from the providers of social services, and involve public actors as well as private non-for-profit or forprofit organisations in the provision of services;
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contractualisation, which is used as an instrument to regulate relationships between state agencies, between purchasers and providers of services, between service producers and service users, and between frontline workers of social service agencies and the management of these agencies.
Although, as mentioned before, both interpretations of governance are represented in the articles that follow, the emphasis will be on the latter. The next two sections of this introduction article will also focus on this meaning of governance. In the first section, we shall argue that the increasing attention of social policy analysts to issues of governance should be welcomed, as developments in the content of social policies and in the organisation and management of their administration and delivery are not independent. The second section will briefly elaborate on various modes of governance of activation, stating that we witness a growth of hybrid forms of the governance of activation that mix hierarchical, market-based and network-based modes of coordinating service provision. The final section of this introduction will briefly introduce the articles of this issue. New governance and the study of social policies In the study of social policy reforms and welfare state transformation processes, social policy analysts traditionally paid relatively little attention to issues of governance. The main focus of their research was on the changing content of income protection programmes and the rise and development of activation policies. Issues of governance were the research domain of scholars of public administration and public management who, on their turn, were less concerned with issues of policy substance. More recently, social policy researchers started to cross traditional (sub)disciplinary boundaries, and show an increasing interest to integrate, as it has been called, the study of ‘‘formal’’ policy (that is, the substance of social policies) and ‘‘operational’’ policy (that is, the organisation and management of policy making and policy delivery processes) (for example, Struyven and Steurs, 2005; van Berkel and Van der Aa, 2005; Bredgaard and Larsen, 2005; Sol and Westerveld, 2005; Newman, 2005; Henman and Fenger, 2006). There are several reasons why we believe that this development in the focus of social policy research should be welcomed. First of all, the introduction of new modes of governance of social policies in general, and of activation policies specifically, has become an ever more important element of
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welfare state transformations. To a certain extent, the growing appeal of new governance is an ‘‘autonomous’’ development in the sense that it takes place independent of social policy reforms, as a result of increasing dissatisfaction with the functioning of state bureaucracies, a growing trust and belief in the virtues of the market, a neo-liberal outlook on the role of the state and of public policies, etcetera. Partly, however, new ways of governing social policies are directly related to substantial policy reforms. In the process of social policy reform, many governments have experienced that transforming welfare states requires institutions and agencies that actually implement and ‘‘produce’’ these reforms, for example, by developing new social services, introducing new criteria for testing benefit eligibility, practicing new attitudes towards claimants, etcetera – and it is one of the objectives of new modes of governance to promote this process of institutional change. Thus, decentralisation is advocated as a logical consequence of the objective to tailor activation to the needs of individuals and of local labour markets; cooperation between agencies responsible for the administration of income protection schemes and the providers of activation services is considered necessary to actually implement the ‘‘work before income’’ paradigm; marketisation of activation services is expected to promote the provision of high-quality services against favourable prices; etcetera. In other words, the social policy and governance reform agendas are closely linked, at least to a certain extent. Secondly, and maybe more importantly, the increasing emphasis in social policy research on issues of governance should be welcomed because governance reforms are not without consequences for the content of social policy programmes. As the literature on the governance of social policy illustrates, and as the articles in this and the next issue of IJSSP will illustrate as well, introducing new modes of governance may have intended as well as unintended consequences for policy substance. The marketisation of the provision of activation services, for example, may result in a situation in which the people most in need of support in job-finding, are in fact excluded from support, as service providers consider them as hard to serve, time-consuming cases. For them, it may be more attractive (and profitable) to focus on clients whose labour-market integration requires limited investments only. Inter-agency cooperation may be considered desirable from the point of view of service integration, but when prepared, implemented, organised, and managed inadequately – and the literature mentions numerous examples – may divert the time and energy of frontline workers and their managers from servicing clients to conflicts about tasks, responsibilities, resources, information exchange, client referrals, etcetera. The decentralisation of policy and financial responsibilities from national to regional or local authorities may produce considerable shifts in priorities guiding regional or local policy making. Financial concerns may shift the focus of activation from a more capability-oriented approach towards stricter employability or ‘‘work first’’ approaches (cf. Bonvin and Farvaque, 2007), may strengthen the emphasis on behavioural control and sanctioning, may – once again – direct attention in activation towards those groups whose social benefit independence can be realised with the smallest investment of resources, etcetera. Irrespective of whether these are intended or unintended consequences of new modes of governance, it is evident that the nature and content of social policies and social services in practice are not simply a product of ‘‘official’’ policy programmes, but also of their governance and implementation. Thirdly, the feasibility of social policy reforms may be influenced by specific governance configurations. As Clasen and Clegg argue, ‘‘different institutional configurations may themselves create quite varied openings for political action and
leaderships’’(2006, p. 547). They substantiate this through an analysis of reforms of unemployment protection schemes in four countries, concluding that ‘‘devolved governance structures coupled with a high degree of self-financing (rather than tax funding), or tight institutional links between unemployment insurance and political economy structures, serve as obstacles for a smoother reform path towards adapting unemployment support to post industrial labour markets’’ (Clasen and Clegg, 2006, pp. 545-6). The Dutch case of social assistance offers another example (van Berkel, 2006). Dutch social assistance, though administered by the municipalities, used to be fully funded by national government, a financing system that was increasingly seen as a major obstacle to make social assistance more activating and promote social assistance independence, as it lacked incentives for municipalities to invest in effective activation. Evidently, these insights also shed new light on the path-dependent nature of processes of welfare state reform (also see Van Gestel and Herbillon in this issue). The governance of activation The rise of new governance is often interpreted as a move away from the traditional bureaucratic, centralised, and hierarchical ways of providing public services towards a service provision model guided by ‘‘the three E’s’’ of economy, efficiency, and effectiveness, inspired by market mechanisms and based on separating the roles of purchasing and providing services (see Osborne and Gaebler, 1993). In public administration terms, the market model replaces the hierarchical model of organising policy. In this interpretation of new governance, it is practically synonymous with New Public Management and its doctrine of ‘‘running government like a business’’. As some of the articles in this issue show (see, for example, Bredgaard and Larssen; Sol and Westerveld), the introduction of market mechanisms in the provision of activation services is taking place in several welfare states; and not only those traditionally characterised as liberal welfare states, as the cases of the Netherlands and Denmark exemplify. Nevertheless, ‘‘defining’’ new governance as a shift from a hierarchy to a market model of service provision would be a simplification. If we want to use the concept of new governance to capture the changes taking place in the provision of activation services and the administration of income protection programmes, it would be more adequate to define it as a hybrid model of the provision of social services; that is, as a mix of hierarchical, market, and partnership/network-based modes of coordination, which may vary from country to country or from social service to social service (see, for example, Newman, 2001). As Martin (2001, p. 209) wrote: ‘‘This suggests not the arrival of a new, hegemonic ‘‘outcome-focused paradigm’ but a more gradual transition characterized by the co-existence and interaction of hierarchical, market based and collaborative frameworks for co-ordinating service delivery’’. The question of what mode of coordination of the provision of social services is used, is not simply a ‘‘technical’’ issue about what actors to involve in service provision, or how to structure the relationships between them. It is also based on, or has consequences for, a range of other issues, such as the values that will guide the service provision process, the role and position of service users in service provision, the accountability of service providers, the discretion of frontline workers involved in service provision, opinions on how the behaviour of service providers and service users should be steered, etcetera. This is clearly illustrated in Table I developed by Denhardt and Denhardt (2000, p. 554). The table distinguishes three models of service provision, which roughly coincide with the three modes of coordination (hierarchy, market, network) mentioned before.
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Limited discretion allowed administrative officials Bureaucratic organisation market by top-down authority within agencies and control or regulation of clients Pay and benefits, civil-service protections
Administrative discretion
Source: Denhardt and Denhardt (2000, p. 554)
Assumed motivational basis of public servants and administrators
Assumed organisational structure
Hierarchical – administrators are responsible to democratically elected political leaders
Creating mechanisms and incentive structures to achieve policy objectives through private and non-profit agencies Market-driven – the accumulation of self-interests will results in outcomes desired by broad groups of citizens (or customers) Wide latitude to meet entrepreneurial goals Decentralised public organisations with primary control remaining within the agency Entrepreneurial spirit, ideological desire to reduce size of government
Steering (acting as a catalyst to unleash market forces)
Multifaceted – public servants must attend to law, community values, political norms, professional standards, and citizen interests Discretion needed but constrained and accountable Collaborative structures with leadership shared internally and externally Public service, desire to contribute to society
Serving (negotiating and brokering interests among citizens and community groups, creating shared values) Building coalitions of public, non-profit, and private agencies to meet mutually agreed upon needs
Citizens
Rowing (designing and implementing policies focusing on a single, politically defined objective) Administering programmes through existing government agencies
Politically defined and expressed in law Clients and constituents
Democratic theory, varied approaches to knowledge including positive, interpretive, critical, and postmodern Strategic rationality, multiple tests of rationality (political, economic, organisational) Result of a dialogue of shared values
Economic theory, more sophisticated dialogue based on positivist social science Technical and economic rationality, ‘‘economic man’’ or the selfinterested decision maker Represents the aggregation of individual interests Customers
Political theory, social and political commentary augmented by naı¨ve social science Synoptic rationality, ‘‘synoptic man’’
Approach to accountability
Mechanisms for achieving policy objectives
Prevailing rationality and associated models of human behaviour Conception of the public interest To whom are public servants responsive? Role of government
Primary theoretical and epistemological foundations
Table I. Three models for the provision of social services New public service
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New public management
Old public administration
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It is not difficult to find all these models simultaneously present in the debates on, and practices of, the provision of activation services. The administration of social benefits, even though these have been increasingly linked to activation, is still taking place according to an ‘‘old public administration’’ logic in most countries. The provision of activation services itself also often reveals traits of the old public administration logic, also in countries that have introduced market mechanisms in the provision of services. For example, they work with more or less specifically described target groups, in order – among others – to prevent market actors from involving people in activation programmes that they do not need. Or they develop regulation that should promote the participation of the most vulnerable people in activation programmes; people that in a ‘‘free activation market’’ may be excluded from participation through processes of creaming and parking. In other words, several countries that have started to introduce the New Public Management logic in the provision of activation, fell back on elements of the old public administration logic, partly to promote typical ‘‘bureaucratic’’ values such as equal access and inclusion, partly to ensure that ‘‘typical’’ market values, such as efficiency, would actually be realised. Nevertheless, adopting elements of the market or NPM logic in the provision of activation services continues. The arguments that governments use in advocating the introduction of market mechanisms are well known by now. At the same time, the experiences with service provision markets have not been as positive as was initially expected by their proponents which, as we saw before, has resulted in processes of reregulation rather than further deregulation, contributing to hybrid models of service provision. The bureaucratic mode of service provision has also lost strength as a consequence of the increasing importance attached to networking and partnerships in activation. The need for cooperation and partnerships goes beyond the cooperation between social benefit and activation agencies already mentioned. This is especially the case where activating vulnerable groups is concerned, whose successful activation depends on the successful integration of a range of services in the areas of health care, housing services, youth care, social care, child care, etcetera. So at the same time that relations of competition are promoted and introduced to improve service quality and reduce service costs, relations of cooperation are advocated in order to deal with complex problem situations and so-called ‘‘wicked issues’’ (cf. Newman, 2001), and to develop tailor-made social services that fit the needs and situations of individuals. Evidently, mixed models of service provision produce tensions and contradictions. Nevertheless, we believe this to be the rule rather than the exception of the new modes of governance currently being practiced in the provision of social services. Because of this, we think it is more useful to study countries in terms of the governance mixes they have adopted, the tensions and problems these produce, the effects these have on the nature of activation and the ‘‘publicness’’ of activation services, the measures taken to cope with ‘‘perverse’’ effects of modes of governance, etcetera, than in terms of their transition from one ideal-typical model of governance to another. The articles In the final section of this introduction, we will briefly present the articles in this special issue. The first article, by Thomas Bredgaard and Flemming Larsen, picks up one of the issues that has been mentioned in this introduction article repeatedly, namely the introduction of market mechanisms in the provision of activation. The article looks at this process as is has developed and is still developing in three countries: Australia,
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The Netherlands, and Denmark, each of which, interestingly, represents a different welfare state regime. The article elaborates on two debates that were briefly discussed before. Firstly, it analyses the effects that the introduction of market mechanisms has had, and shows how in the two countries with the longest tradition of marketisation – Australia and The Netherlands – processes of reregulation have taken place in order to deal with some of its negative or ‘‘perverse’’ effects. Secondly, the article examines the relationship between the market dominated model of governance underlying the provision of activation schemes, and the substance of activation services. It shows the complexity of this relationship: on the one hand, one could argue that the introduction of market mechanisms promotes a ‘‘work first’’ type of activation, emphasising quick labour-market reintegration rather than the development of human resources; on the other hand one could argue, that the introduction of market mechanisms supports the ambition of governments to reform activation into a more ‘‘work first’’ direction. In the second article, Els Sol and Mies Westerveld discuss the phenomenon of contractualism as one of the characteristics of new modes of governance in activation. Their focus is on client contracts specifically, which are being used now in many countries and are known as Job Seekers’ Contracts, Personal Action Plans, Individual Reintegration Agreements, etcetera. Based on empirical research in eight countries, the authors distinguish two more general types of client contracts. One type of contract primarily functions as a top-down arrangement, whereas the other offers clients more room for voice and choice. Discussing the advantages and disadvantages of client contracts, they argue that whereas the first type of contract hardly deserves the qualification ‘‘contract’’, the second type does, at least under certain conditions of mutuality or reciprocity. According to the authors, the privatisation or marketisation of the provision of activation potentially offers opportunities for client contracts to develop into ‘‘real’’ contracts. As was mentioned before, one of the objectives of the introduction of new modes of governance is to provide implementation conditions that promote that institutions and agencies responsible for the administration and delivery of policy programmes actually put policy reforms into practice. This issue has turned out to be of crucial importance in almost all welfare states that attempt to activate their social policies: policy implementing institutions play a crucial role in the successfulness of these attempts. In the third article, Toma´sˇ Sirova´tka, Pavel Hora´k, and Marke´ta Hora´kova´ analyse how implementation conditions influence the nature and content of activation in practice. Although their research focuses on the Czech case, and although the specific implementation conditions in the Czech Republic most likely differ from those in other countries, their general argument is probably valid for other countries as well: namely, that implementation conditions of activation have an impact on the profile of activation and, therefore, influence its successfulness. The article shows, that implementation conditions such as frontline workers’ caseloads and skills, or the availability of activation programmes and schemes, may have an impact on several characteristics of the activation process in practice: the nature and size of the target groups actually involved in activation, the obligatory nature of activation, the approach used in activating unemployed people, etcetera. These characteristics may differ from ‘‘official’’ policies considerably, adding a significant element of bottom-up policy making to the dominant top-down policy making process. In the fourth article, Nicolette van Gestel and Jean-Michel Herbillon analyse changing modes of governance in two continental welfare states, France, and
The Netherlands, from the perspective of theories on institutional change. They argue, that the processes of institutional change that can be observed in both countries cannot be explained in terms of either convergence or path-dependency, but that we need both theoretical frameworks in understanding these processes. Convergence takes place as far as general trends in welfare state reforms are concerned: the trend towards activation, the changing role of the national state, and the involvement of non-state actors in the provision of social services. At the same time, path dependency is useful in making sense of the variance in the more detailed reform trajectories that both countries represent. In addition, both countries introduced changes that could be classified as ‘‘path breaking’’: they deviate from traditional national paths significantly, but are also quite different when compared cross-nationally, unlike what one would expect on the basis of the convergence thesis. The final article in this issue, by Ha˚kan Johansson and Bjørn Hvinden, adopts what we before called a broad perspective on governance. The article takes ‘‘activation regime’’ theory as its starting point, distinguishing two models of activation: a universalist and a liberal regime. Focusing on the Nordic countries, the authors raise the question, whether it is adequate to characterise the Nordic model of activation as universalist, i.e. uniform in the scope and content of activation, capacity building rather than incentive strengthening in orientation, and not systematically submitting all citizens to the work requirement. As far as the latter is concerned, the authors conclude that nowadays, work requirements are strong in the Nordic countries, and that the Nordic countries have become more similar in this respect. As far as the uniform nature of Nordic activation is concerned, it is argued that the distinction in activation between the insured and non-insured, also reflecting differences in treatment in activation, renders the qualification ‘‘universalist’’ inadequate; although recent developments in the institutional architecture of activation might in the future create more uniformity in the activation of both target groups. References Bonvin, J.-M. and Farvaque, N. (2007), ‘‘A capability approach to individualised and tailor-made activation’’, in van Berkel, R. and Valkenburg, B. (Eds), Making it Personal. Individualising Activation Services in The Netherlands, Policy Press, Bristol. Borghi, V. and van Berkel, R. (2007), ‘‘New modes of governance in Italy and The Netherlands. The case of activation policies’’, Public Administration, Vol. 85 No. 1, pp. 83-101. Bredgaard, T. and Larsen, F. (2005), Employment Policy from Different Angles, DJOeF, Copenhagen. Carmel, E. and Papadopoulos, T. (2003), ‘‘The new governance of social security in Britain’’, in Millar, J. (Ed.), Understanding Social Security: Issues for Social Policy and Practice, Policy Press, Bristol. Clasen, J. and Clegg, D. (2006), ‘‘Beyond activation: reforming European unemployment protection systems in post-industrial labour markets’’, European Societies, Vol. 8 No. 4, pp. 527-53. Denhardt, R.B. and Denhardt, J.V. (2000), ‘‘The new public service: serving rather than steering’’, Public Administration Review, Vol. 60 No. 6, pp. 549-59. Gilbert, N. (2002), Transformation of the Welfare State. The Silent Surrender of Public Responsibility, Oxford University Press, Oxford. Handler, J. (2004), Social Citizenship and Workfare in the United States and Western Europe. The Paradox of Inclusion, Cambridge University Press, Cambridge.
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Henman, P. and Fenger, M. (Eds) (2006), Administering Welfare Reform. International Transformation in Welfare Governance, Policy Press, Bristol. Jessop, B. (2004), ‘‘Governance and metagovernance: on reflexivity, requisite variety, and requisite irony’’, in Bang, H. (Ed.), Governance, as Social and Political Communication, Manchester University Press, Manchester, pp. 142-72. Lødemel, I. and Trickey, H. (Eds) (2001), An Offer You Can’t Refuse: Workfare in International Perspective, The Policy Press, Bristol. Martin, S. (2001), ‘‘Implementing ‘‘Best Value’’: local public services in transition’’, Public Administration, Vol. 78 No. 1, pp. 209-27. Newman, J. (2001), Modernising Governance. New Labour, Policy and Society, Sage, London. Newman, J. (Ed.) (2005), Remaking Governance. Peoples, Politics and the Public Sphere, Policy Press, Bristol. Osborne, D. and Gaebler, T. (1993), Reinventing Government. How the Entrepreneurial Spirit is Transforming the Public Sector, Penguin, London, New York, NY. Serrano Pascual, A. (Ed.) (2004), Are Activation Policies Converging in Europe? The European Employment Strategy for Young People, ETUI, Brussels. Sol, E. and Westerveld, M. (Eds) (2005), Contractualism in Employment Services. A New Form of Welfare State Governance, Kluwer, The Hague. Struyven, L. and Steurs, G. (2005), ‘‘Design and redesign of a quasi-market for the reintegration of jobseekers: empirical evidence from Australia and The Netherlands’’, Journal of European Social Policy, Vol. 15 No. 3, pp. 211-31. van Berkel, R. (2006), ‘‘The decentralization of social assistance in The Netherlands’’, International Journal of Sociology and Social Policy, Vol. 26 No. 1-2, pp. 20-32. van Berkel, R. and Hornemann Møller, I. (2002), Active Social Policies in the EU. Inclusion Through Participation?, Policy Press, Bristol. van Berkel, R. and Valkenburg, B. (2007), Making it Personal. Individualising Activation Services in the EU, Policy Press, Bristol. van Berkel, R. and Van der Aa, P. (2005), ‘‘The marketisation of activation services: a modern panacea? Some lessons from the Dutch experience’’, Journal of European Social Policy, Vol. 15 No. 4, pp. 329-45. Further reading Hoggett, P. (2006), ‘‘Conflict, ambivalence, and the contested purpose of public organizations’’, Human Relations, Vol. 59 No. 2, pp. 175-94. About the authors Rik van Berkel is researcher and lecturer at the Department of Interdisciplinary Social Science, Utrecht University, Heidelberglaan 2, 3584CS Utrecht, The Netherlands. His research interests include unemployment, (comparative) social and activation policies and public governance. Rik van Berkel is the corresponding author and can be contacted at:
[email protected] Vando Borghi is Professor at the Department of Sociology, University of Bologna, Strada Maggiore 45, 40125 Bologna, Italy. He works at the Faculty of Political Sciences, where he teaches sociology of organisation and sociology of development. His main research interests are sociology of work, economic and organisational processes.
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Implementing public employment policy: what happens when non-public agencies take over? Thomas Bredgaard and Flemming Larsen
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Centre for Labour Market Research (CARMA), Aalborg University, Aalborg, Denmark Abstract Purpose – The purpose of the article is to analyse the interconnections between formal policy reforms and operational policies, specifically between new governance and employment policy. The main question is what happens to public employment policies when they are contracted out to nonpublic (for-profit and not-for-profit) agencies? Design/methodology/approach – The case is the contracting out of the public employment services in Australia, Holland, and Denmark. The data consists of in-depth interviews with key respondents in the three countries, observations at service delivery agencies, and desk studies of existing research. Findings – The new quasi-market models seem to have difficulties in living up to the preconditions for a well-functioning market, as well as political expectations. Contracted out employment systems do not seem to create higher efficiency, innovation, quality, and less bureaucracy than previous public bureaucracies. But a quasi-market model, on the other hand, does seems to create a new type of employment policy, and new conditions for steering and governing the labour market and employment policy. This implies that choosing a quasi-market model involves much more than a discussion about ‘‘technicalities’’ like (cost) efficiency and productivity. Some of the most important – but often neglected and depoliticised – policy changes seem to emerge from changes of the institutional set-up rather than changes of specific laws and ministerial orders. Originality/value – The article is innovative in trying to identify relationships between management structure and policy content. Often these changes are analysed in separate disciplines, and isolated from each other. In this article we provide an integrated and multidisciplinary approach. Keywords Contracting out, Employment, Public policy, Denmark, Holland, Australia Paper type Research paper
Introduction Like most other areas within welfare policy, the employment and social policy areas are undergoing fundamental changes in many countries. Partly in the shape of new forms of governance inspired by new public management (NPM), partly through new policies oriented towards activation and stronger disciplining of the unemployed (work first) (cf. Bredgaard and Larsen, 2005; Sol and Westerveld, 2005). It is, however, remarkable that in the research field there seems to be a division of labour so that changes in public administration and changes in the substance of employment policies are dealt with separately. But there is an interesting question to investigate here: whether, and if so how, formal policy reforms (changes of the institutional set-up) are related to operational policy changes? And whether changes in the institutional set-up create deliberate policy changes, or bring about more indirect and unintended policy changes? We propose that changes in management structure are capable of supporting policy changes by means of new implementation structures (and often do – whether intentionally or not). However, management reforms tend to be dominated by ‘‘technical’’ discourses on their alleged effectiveness and efficiency, whereas their
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consequences for policy content tend to be neglected or given limited attention. Even when NPM reforms do support an intended policy shift, there seems to be very little public discussion about them. Far-reaching policy changes become politically invisible and de-politicised. Contracting out the public employment service in Australia, Holland, and Denmark Our empirical case is the contracting out of the public employment services (PESS) in Australia, The Netherlands, and Denmark. The main question is what happens to public employment policies when they are contracted out to various non-public (forprofit and non-profit) agencies. The data consists of in-depth interviews with key respondents in the three countries, observations at service delivery agencies, and desk studies of existing research. The study has been published in Danish (Bredgaard and Larsen 2006), and is financed by the Danish Ministry of Employment. Contracting out employment services to non-public agents is one of the most recent NMP-inspired ‘‘trends’’ in the employment field and a number of countries have embarked on this approach (cf. Considine, 2001; Brodkin, 2005; Van Berkel and Van der Aa, 2005; Bruttel, 2005; Struyven 2004, 2005; Bredgaard and Larsen 2006; Sol and Westerveld, 2005). We compare Denmark with two of the pioneers, Australia and The Netherlands, as both countries operate a full-scale tendering model. That is, all target groups of unemployed are referred to external service providers, and the PES has ceased to provide traditional employment services to the unemployed. Instead, public authorities are used as gate-keepers to the market and to pay out social security benefits. Australia and Holland represent examples of radical models, allowing us to study the implications of a shift to a tendering model in its pure form. Australia adopted a fullscale tendering model already in 1998, and The Netherlands in 2001. Australia is just starting its fourth tendering round, and The Netherlands its fifth. It is therefore possible to identify trends and developments over time, both in the market structure and in the public governance of the market. Denmark embarked on the process on a smaller scale in 2002 with a partial contracting out only, as just about a third of the unemployed are referred to non-public providers. In the following, the design of our study will be explained and the overall empirical conclusions presented, focusing on the relationship between NPM reforms (contractualism, tendering, outcome payment, and non-public providers) and the development in the substance of employment policies. Analytical approach and findings Our starting point for analysing the contracting out of the PES is the question whether a tendering model is able to fulfill the underlying, more or less explicit, objectives: does the model indeed delivers on its promises of higher efficiency, cost-reductions, and innovation? Such a (quasi-)market analysis, however, tends to focus on ‘‘technicalities’’, detracting attention from important policy changes. For an integrated approach it was necessary to include research questions on the implications of contracting out for the substance of employment policies and for the scope for political governance and regulation. Our analysis therefore includes three research questions: (1) How does a tendering model in employment policy performs in relation to the underlying intentions? Has a market for employment services been successfully
established, capable of fulfilling the intentions of providing a more efficient and innovative system? (2) Which implications does the tendering model have for the scope for political governance and regulation in the field of employment policy? (3) What is the relationship between the tendering model and the substance of employment policies? What types of initiatives are offered by the providers, which instruments are used, how are unemployed individuals treated, and in what ways does the nature of employment policy change? To illustrate the proposition about the relationship between NPM reforms and policy changes, the following sections will describe our analytical approach, and the most important empirical conclusions. Does the quasi-market model deliver? The first step in the analysis involves identifying the dominant policy arguments on which the decision to contract out the PES system was based. Since the market in this context is not a conventional market, but a quasi-market (cf. Le Grand and Bartlett, 1993), the aim is to evaluate whether such a quasi-market has been established, and to what extent the identified policy arguments have been met. Obviously the policy arguments behind the tendering model in employment policy vary in the three countries; nevertheless, a number of common arguments can be found across the countries. The principal idea is to create a free market for employment services in which (primarily private) service providers bid in open competition by public tendering. This is expected to produce ‘‘better and cheaper’’ employment services than the former system. The behaviour of service providers is regulated mainly through economic incentives, and regulation takes place by means of contracts with the public authorities. The general objective of the employment policy is to find the quickest possible way back to ordinary employment, thus easing the pressure on social security spending. The dominant policy arguments can be summed up as expectations of: .
Improved efficiency – open competition between independent service providers is expected to result in improved efficiency of the services (understood as quicker and higher employment effects). This then creates more ‘‘value for money’’ (less public spending).
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Improved quality – service providers specialising in specific target groups are expected to contribute with more innovative methods and tailored individual solutions, thus improving the quality of services. Freedom for the unemployed to choose a provider is also expected to improve the quality of services.
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De-bureaucratisation – quasi-market models are seen as smoother, more flexible, and responsive to changes in the business cycle and the needs of target groups, thus creating a less bureaucratic public sector and employment service where individuals are not clients but consumers and customers.
Our aim is to test the quasi-market models in the three countries on these premises. For such an analysis, inspiration can be found in the theory on quasi-markets, which helps explain the development from public bureaucratic systems to new hybrid systems, mixing state, and market in the social policy field (Le Grand and Bartlett, 1993). The term market is appropriate in this context because the previous, more or less
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monopolistic, state provision is being replaced by independent and competitive market relations. However, they are quasi-markets because they differ from conventional markets in at least three ways: (1) not all providers aim at maximising profits or are privately owned; (2) demand in the market is often public and not private; and
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(3) the choice of provider is often delegated to a third party (the purchaser) (cf. Le Grand and Bartlett, 1993). This implies that the preconditions for well-functioning quasi-markets in welfare policy are different from those of conventional markets. Le Grand and Bartlett (1993, pp. 13ff.) use four evaluation criteria: efficiency, responsiveness, choice, and equity. To achieve these criteria four preconditions must be fulfilled: (1) a competitive market structure must be established (with many service providers as well as purchasers, easy entry and exit, and free pricing); (2) accurate information on costs and quality must be available, together with low transaction costs to avoid moral hazard and adverse selection; (3) providers should be motivated by economic incentives, and purchasers by the welfare of citizens; (4) creaming and parking of clients (inequality) must be avoided. Provided that these preconditions are met – although the quasi-market theory does not provide any marginal values – the quasi-market can be defined as well-functioning. In our study we analysed whether well-functioning quasi-markets have been established in employment policy in Australia, Holland, and Denmark. We found that competitive quasi-markets with relatively many providers and purchasers have emerged, especially in Holland and Denmark, and less so in Australia (cf. also Sol and Westerveld, 2005). However, all three quasi-markets have difficulties in functioning in accordance with the arguments and conditions specified in advance. The idea that the invisible hand of the market will produce better and cheaper services turns out to be difficult to realise in practice. Establishing and maintaining a market structure in the employment field require substantial public regulation. One problem is that tendering rounds produce high transaction costs; another is that markets tend to result in creaming of the strongest unemployed and parking of the weakest unemployed. Steering by economic incentives is a highly vulnerable approach and seems to call for extensive and continuous public regulation (most notably in Australia). The philosophy of user choice as a driver to secure quality also proves elusive in practice. Partly because it is difficult for the unemployed to make an informed choice, to the extent they are allowed to do so, partly because choice increases transaction costs, which public authorities try to limit. Generally speaking, there seems to be an inbuilt dilemma: the freer and more competitive the quasi-market model is the higher the transaction costs and the more unacceptable prioritising of target groups. Then do services become more effective and efficient, in terms of better results and lower costs? Giving an unambiguous answer to this question is difficult. At present, it is not possible to evaluate the efficiency of these quasi-markets, neither in terms of cost-effectiveness nor in terms of employment outcomes. Knowledge on results and effects is generally insufficient, both before and after contracting out. Even though it is difficult to make comparisons of the systems
before and after contracting out, there are indications that the process has produced lower costs in Australia; however, this could also be explained by the discontinuation of previous cost-heavy programmes (such as wage-subsidy schemes and educational programmes) (cf. OECD, 2001; Productivity Commission, 2002). It is not possible to make similar comparisons for The Netherlands. In short, this means that the market has difficulties in functioning, judged on its own premises (cf. also Considine, 2001, 2005a, 2005b; Sol, 2005; de Koning, 2004; Struyven, 2005; Van Berkel and Van der Aa, 2005). We therefore find that the preconditions for a well-functioning market for employment services have not been fulfilled. In itself, the market generates needs for public regulation which, combined with political regulation to reduce the problems created by the market, leads to increasing public management and regulation of the market. Despite some country variation a gradual development away from the invisible hand of the market towards the visible hand of the state can thus be observed, as we are going to see in the following. Public governance and regulation of employment services On the second research question we take our point of departure in the literature on contractualism and NPM (cf. Sol and Westerveld, 2005; Hood, 1991; Barzelay, 2001; Lane, 2000; Klausen and Sta˚hlberg, 1998). In the employment field, there is a clear tendency towards increasing use of various forms of contracts. Contracts are used internally in the PES system to regulate relations between superior and subordinate levels. Contracts are used between public authorities and individual providers of employment services. And (quasi-)contracts are used between authorities (case managers) and the unemployed, for instance job plans. In principle, this trend means that public authorities are increasingly trying to regulate society at ‘‘an arm’s length’’ and leave specific management and provision of public services to subordinate levels, be it local job centres, service providers or the individual case manager, and unemployed individual. On the other hand, contractualisation leads to new – softer, more indirect – governance and regulation. An important point is that contractualism does not lead to less regulation, but a different kind of regulation (cf. Majone, 1994, 1997; Jordana and Levi-Faur, 2004); a new kind of regulation that implies that the role of public employees changes from complying with rules and procedures to organising activities and choice through prices and performance-related pay. That is, a development from processes and activities (input) towards results and effects (output and outcome). The trend towards contractualisation is closely related to the NPM wave, which has been sweeping across most Western countries since the early 1990s (cf. Hood, 1991; Barzelay, 2001; Lane, 2000; Klausen and Sta˚hlberg, 1998). In addition to proposing concrete management instruments to improve quality and efficiency of public services, NPM also constitutes a normative frame of reference for the introduction of more market and less state. This can be achieved by incorporating market elements internally in the public sector (e.g. management by objectives, performance pay, and outcome contracts), or by exposing the public sector to competition (e.g. contracting out, privatisation, purchaser – provider splits, and voucher schemes). NPM is linked with a general neo-liberal tendency to marketise and individualise relations between the public sector and its stakeholders (OECD, 1995, 1997). Contracting out of the public sector is based on the assumption that the private sector is more efficient than the public. In this perspective, contractualism becomes not just
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the increasing use of concrete NPM instruments in specific areas, but an entirely new way of governing and regulating the public sector (cf. Mosley and Sol, 2005). The development of quasi-markets in which decentralised agents provide public services constitutes a central part of this contractualism. Ideological reasons aside, there are a number of substantial reasons why contractualism is spreading in the employment field. The most important are: (1) dissatisfaction with the quality and the results of the PES system; (2) increasing awareness that regulation cannot be carried out as a simple, linear and hierarchical process; and (3) a perceived need to reduce costs by using more efficient instruments (cf. Sol and Westerveld, 2005, pp. 383-4). In this context, our primary interest is to study the consequences of changing the governance model for the PES system; i.e. moving towards the tendering (or quasimarket). A number of identical design and implementation issues will have to be addressed when a market model in the employment field is introduced (cf. Struyven, 2004, 2005). The most fundamental question is what will be the implications of a market model for the possibilities and limitations of governance in the employment field. Our empirical findings demonstrate that changing governance principles for PES provision is more than a ‘‘technical’’ administrative exercise. An important point is that a market for employment services is not self-regulating, but requires active regulation by the public authorities (cf. Considine, 2005b). There seems to be a pattern whereby markets are set free in the first tendering round, among other things to create sufficient volume and offer attractive competitive conditions for providers. After that, the free market competition is gradually reined in by a number of public steering initiatives, intended to remedy the most inappropriate forms of market behaviour and guarantee politicians and authorities some insight into the behaviour of the providers. The adding of ever more detailed regulation from the authorities means that the providers’ freedom to choose methods as well as flexibility and dynamism are gradually restricted; at the same time services become increasingly standardised, and the market bureaucratised. This development is furthest progressed in Australia, which in practice has experienced a shift away from a tendering model towards a preferredprovider model (Considine 2005a, 2005b; Sol and Westerveld, 2005). In the Netherlands, the market seems to be working on its own premises to a larger extent, although the tendering procedures and market conditions have undergone repeated changes, and there seems to be increasing political dissatisfaction with the outcomes produced by the market (de Koning, 2004; Sol, 2005). The challenge for public authorities is to strike a balance between the dynamism of the market and the need to fulfill political goals (such as avoiding inequality). On the one hand, authorities try to let the market work on its own premises to achieve improved efficiency, quality of services, and innovation. On the other hand, constant interventions are needed to remedy the unintended outcomes of the market’s behaviour; e.g. to reduce creaming and parking, transaction costs, and underinvestment in education. This then erodes the original market principles of competition, choice, and autonomy. Striking the right balance between the logic of the market and social goals is therefore inherently difficult (Struyven, 2005). And the
consequence is almost constant adjustments and changes to the tendering system (Considine, 2005a, 2005b). It is evident that it is difficult to regulate and control the labour market by means of external service providers, contract management, freedom of methodology, and economic incentives. The ‘‘invisible’’ behaviour which safeguards quality, respect, equity, and other inter-personal values is almost impossible to quantify, and consequently very difficult to write into a contract or monitor through outcome evaluations. The logics of management by economic incentives and outcome management also imply that orientations among the authorities and providers become short-term. Only initiatives known to deliver immediate and quantifiable outcomes (shortest route to a job) will be preferred in such a market. Administrative systems are therefore gradually built up to survey, monitor, and control behaviour in the market. That is, steering of the activities on the input side. An alternative, however, is partnership, based on mutual trust and exchange of experiences. Examples of such a partnership approach can be found in Denmark, in the interactions between authorities and providers. A full-scale tendering model, however, seems to hamper the potential for building up partnerships based on mutual trust and common expectations, if the service supply is won on market conditions and in tendering rounds. A tendering model easily leads to conflicts of interest between principals (authorities) and agents (providers). As the principals want to keep agents at an arm’s length, expectations and outcome demands are communicated to the providers through tendering rounds and contracts. In principle, this secures transparency in the market and a level playing field for providers. But it is, on the other hand, exactly a kind of dialogue and cooperation most providers call for. As they see it, cooperation and dialogue allow corrections, improvements, and harmonisation of interests, which may secure a more targeted and successful service delivery. However, as the authorities see it, such cooperation might bias the process and favour some providers over others, and therefore not secure a level playing field. It is evident that changing the public governance of employment policy from implementation based on public and bureaucratic management principles to implementation through market- and competition-based non-public agents is anything but a simple administrative exercise. Employment policy is a field where service provision will always be subject to political demands: demands that can be difficult to meet when relying on indirect, incentive-based management of non-public agents. Paradoxically, there are indications that such an approach results in attempts to manage non-public agents in a more traditional bureaucratic way through increasing direct public regulation (Bredgaard and Larsen, 2006). The substance of employment policy Analysing whether the tendering model is able to work judged on its own premises, or whether the critics are right that it cannot (using the opposite arguments), is of course highly relevant. But in many ways, it is an isolated technical–rational discussion about the implementability of the tendering model, and whether the field can be managed in a more efficient, cost-effective, more innovative, etcetera way. The substance of employment policies (input, instruments, methods, rights, responsibilities, etc.) tends to become a black box. The final research question, therefore, deals with the relationship between the quasi-market model and the substance of employment policy. So far, this question has been analysed only to a very limited extent in existing literature (for a few exceptions, see Considine, 2001, 2005a, 2005b; Sol, 2005; Van Berkel and Van der Aa,
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2005). The majority of existing analyses have focused on whether employment services are suitable for contracting out (cf. Bruttel, 2005), to what extent the formal intentions behind contracting out have been met, or whether the preconditions for a wellfunctioning quasi-market have been fulfilled (cf. Struyven and Steurs, 2003, 2005); and to what extent contracting out of employment services reflects new management structures and NPM, including which organisational and administrative consequences this may have (cf. Sol and Westerveld, 2005). We assume that such a shift in governance will have an impact on policy content. And this may be one of the intended political motives behind the reforms. One assumption being that a work-first approach can more easily be implemented through a non-public implementation structure than by traditional public employment officers. External service providers that are motivated by economic incentives are tendered to find the shortest possible route to ordinary employment. They are expected to use their business networks and to be tougher in availability assessments, use of sanctions, demands, and other motivational initiatives. To some extent, traditional public employment officers are even seen as barriers towards such a shift in employment policy (Larsen and Andersen, 2004, chap. 5; Bredgaard et al., 2005). Considine (2001, p. 111) has documented a similar relationship in Holland. For-profit providers were significantly more inclined than public advisors to say that ‘‘lack of effort’’ rather than ‘‘external circumstances’’ was the reason for unemployment. Moreover, 60 per cent of private advisors favoured that the goal of their organisation was to ‘‘help clients get jobs quickly’’ compared to 33 per cent of public advisors. Finally, Considine found that 60 per cent of for-profit advisors agreed that their ‘‘organisation picks out the most capable clients and gives them the best service’’ (creaming) compared to only 24 per cent of public advisors (Considine, 2001, p. 111). At the same time it seems to be a common characteristic in all three countries that there is a political desire to steer employment policy in a work-first direction (Peck, 2001; Torfing, 2004; Bruttel and Sol, 2006; Struyven, 2005). This implies a shift in policy substance away from a human-capital approach that emphasises skills upgrading, education and training, and need-orientation, towards a strategy of work-first, where short-term initiatives, duties, demands, and sanctions replace more long-term activation initiatives. Although they aim at the same; namely economic self-sufficiency, these two active strategies are fundamentally different as to problem definition, use of instruments, and objectives, as can be seen in Table I. We test the assumption that there is a relationship between contracting out and the work-first approach by comparing experiences from the three countries, and by analysing the following questions: are the methods used standardised or tailor-made? Are methods new and innovative or conventional and well-known? Which instruments are used, and can a shift from formal education and training towards job-search and job-match activities be observed? Are service providers capable and willing to live up to a work-first approach, for instance by enforcing tough availability assessments and report sanctioning of the unemployed? Obviously, some variation in choice of strategies and methods is to be expected among providers; but we have found a number of general mechanisms cutting across the three countries. Our empirical findings confirm that a number of significant changes in the employment services do occur. The most important findings are: (1) that the providers have a very strong focus on outcomes, and organise their operations accordingly (this is true for non-profit providers as well);
Approach Strategy What is the main problem? Where is the problem? What is the solution?
Motivation Orientation for problem solution Social security benefits
Programme goal for the unemployed individual End goal
Active approach Work first Disciplining Lack of economic incentives and motivation The supply side Tougher availability assessments, mobility demands and sanctions, duty of activation, reduced benefit levels, or job/employment allowances Extrinsic Labour-market orientation Benefits conditional on duty to work or participate in activation programmes (quid pro quo) Job as quickly as possible Self-sufficiency
Human capital Integration Lack of competences and qualifications The supply side Skills upgrading, education and training, individual need-orientation
Passive approach Social security Security Lack of jobs and lack of basic income The demand side Decent level of income support
Intrinsic Labour-market and social orientation Benefits conditional on improvement of work capacity (quid pro quo)
None Social orientation
Improve long-term work and earning capacity
Improve quality of life
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Unconditional and universal benefits (no quid pro quo)
Social security and equity
Source: Modified version of Bredgaard et al., 2003
(2) that the providers have surprisingly weak business networks and low application of direct job matching activity; (3) that the (quasi-)markets fail to come up with innovation and develop new methods to any significant extent; (4) that formal education and training activities are used only to a limited extent; and (5) that a new kind of relationship with the unemployed individual emerges (from client to consumer). Although there are some opposing tendencies contracting out does seem to assist a shift in the substance of employment policy towards work first. However, this is both cause and effect: a political intention underlying the introduction of the tendering model, and a result of the model. The ultimate focus of the providers is the quickest possible route to (re)employment, but they hardly ever use a direct matching strategy (due to their weak business networks), and therefore largely concentrate on improving personal and social competences of the individual unemployed person, including jobsearch training. There is a limited focus on improving formal qualifications. Despite some differences, the providers instead tend to focus on improving the competences
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and the motivation of the individual to take or seek a job. Instead of matching an unemployed person with a firm in need of labour, the unemployed are encouraged to use self-help and self-service (e.g. internet-based job-banks). Education and training activities tend to decline when payment models have high- and short-term outcome fees (often 13 or 26 weeks), and when providers shoulder the economic risks of the market, which make investments in long-term, uncertain, and cost-intensive measures unlikely. However, at one point in particular the generalised practices of the providers diverge from the expected work-first approach: providers are reluctant to use tough availability assessments, sanctions, and control. They see an unemployed individual as a consumer (customer in their shop) and they therefore aim to create a relationship of trust. At the same time, there is some evidence of a tendency towards ‘‘passivisation’’ of certain groups of unemployed, i.e. parking of the weaker unemployed. Another characteristic is a depolitisation of the employment field because it is difficult to gain any insight into the activities and behaviour of the providers in a tendering model. This is an inherent trait of the quasi-market model as the authorities focus on results and outcomes, and providers, for competitive reasons, have an interest in keeping ‘‘good methods’’ confidential. And it also seems to be a result of the difficulties in building up a reliable, systematic monitoring system which does not conflict with the innovation and freedom of methodology in the market. Summing up and conclusion As the findings from our analysis of the three research questions show, it is evident that contracting out employment services by tendering has implications for both the governance and substance of employment policy. The brief summary of our empirical findings might seem to paint a rather pessimistic picture of the experiences so far. So let us further examine how governance reforms and employment policy substance are related, and why (apart from ideological motives) political decision makers may still choose to contract out employment services, even if the pessimistic picture turns out to be a realistic one. Ideological motivations for choosing to contract out employment services aside, the analysis still gives at least four reasons for political and administrative decision makers to introduce the quasi-market model. First, the model is well suited to support a politically intended shift in the content of employment policy. Internationally, a trend is evident towards a stronger work-first approach. This implies a shift away from both a traditional passive social security approach (where lack of demand is seen as the main cause of unemployment) and a human capital approach (where the unemployment problem is interpreted as lack of competencies and qualifications). Instead the work-first approach interprets unemployment as a result of inadequate (individual) economic incentives and motivation. The objective is to find a job as quickly as possible, where any job is seen as a ‘‘good job’’. Implementing such a policy shift has, however, turned out to be difficult within existing public implementation structures, as intentions are distorted and eschewed during the implementation process towards traditional ways of service delivery (Larsen et al., 2001; Bredgaard et al., 2003; Considine, 2001). The strong tripartite representation (corporatist system) in The Netherlands and Denmark, and its influence on both formulation and implementation of employment policy, has not made realisation of this shift any easier either. But the quasi-market model offers a depoliticised and efficient structure for implementation, with an ultimate focus on work first. In continuation of this policy shift, there seems to be distrust, in particular at the
ministerial level, of educational activities for the unemployed in all three countries. The tendering model is very efficient to prevent the use of supposedly ‘‘expensive and unproductive’’ skills upgrading of the unemployed. Even more so, if the risk of using it (responsibility for finance) is off-loaded on the providers, and they are at the same time rewarded for short-term employment outcomes. Secondly, the unemployed are being prioritised, to strike a balance between productive and unproductive investments (strong and weak clients). Tailoring initiatives and cost-efficiency is a positive formulation of this approach, but in reality it is a way to avoid spending disproportionate resources on unemployed people with few chances of ever finding a job or avoiding that resources are spent on unemployed people capable of finding a job on their own. Private providers seem much more susceptible towards such creaming and parking than traditional public employment advisors (cf. also Considine, 2001). From a public policy perspective the result is, however, increasing inequality in service delivery, and inequality before the law. Thirdly, contracting out offers political decision makers better tools to control the costs of employment policy. Admittedly, it might be more expensive to enter into contracts with non-public agents in the short run, but it does give more flexibility, as it is possible to increase and decrease the level of activities by buying more or less from the providers, depending, for example, on fluctuations in unemployment figures. The problems of organisational restructuring are transferred from the public to the private sector. When unemployment figures are low it is probably much easier to fire a private provider than a public servant. Finally, contracting out tends to depoliticise the employment field. This is true both in the general public debate, as well as in the implementation process. The intended policy shift is in fact far from uncontroversial, with its stronger focus on work first and less on human capital or social security, and its (perhaps less intended) prioritising of investment-worthy groups of unemployed. Implementing such a policy in a traditional public system would be bound to cause controversy (and even more so in a corporatist public system like the Danish and to some extent the Dutch). As pointed out before, the quasi-market model comes with a number of inbuilt problems, which necessitate political intervention. Paradoxically, the majority of these problems are caused by the model’s inability to actually work in accordance with its on premises. The problems include high transaction costs; little tailoring of initiatives for the individual unemployed person; lenient reporting on the unemployed, few new, and innovative methods; and continual re-regulation and bureaucratisation to make the model function. The latter mainly because it is difficult to control providers by means of economic incentives (which also erodes the possibilities of relations based on trust and cooperation). Furthermore, the model’s inbuilt mechanisms of prioritising the unemployed (creaming and parking) and neglect of expensive skills upgrading programmes can grow to a level that is politically unacceptable and requires political intervention. Examples of this have been seen in all three countries. To this should be added that the political price to be paid for depolitisation is that the model implies signing away some of the existing political governance tools. Coordinating an overall, coherent employment policy is made considerably harder, in particular the parts of the policy aimed at servicing and activating the demand side. Bottlenecks in the labour market are one example of a problem it will be more difficult to help solve; but also the general servicing of the needs of the labour market are hampered. This is clearly evidenced in the dissatisfaction among employers with both the Australian job network and the Dutch reintegration market. The needs for
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coordination are left to indirect incentive management, market self-regulation, and supply-side orientation (keeping the unemployed constantly motivated to seek employment). Experiences from Australia and The Netherlands, however, seem to indicate that such mechanisms will not create a coordinated employment policy. Political decision makers may have a variety of reasons for contracting out public employment policy. One thing should, however, be an obvious conclusion from this analysis. Choosing a quasi-market model involves much more than a discussion about ‘‘technicalities’’ in relation to how employment policy is implemented in the most effective and cheapest way. A quasi-market model (and its design) does have an important impact on the substance of employment policy and the possibilities of governing the labour market. References Barzelay, M. (2001), The New Public Management: Improving Research and Policy Dialogue, University of California Press, Berkeley. Bredgaard, T. and Larsen, F. (2005), Employment Policy from Different Angles, DJØF Publishing Copenhagen, Copenhagen. Bredgaard, T. and Larsen, F. (2006), Udliciteringen af beskæftigelsespolitikken – Australien, Holland og Danmark, (Contracting out Public Employment Policy – Australia, The Netherlands and Denmark), Jurist- og Økonomforbundets forlag, Copenhagen. Bredgaard, T., Dalsgaard, L. and Larsen, F. (2003), ‘‘An alternative approach for studying public policy – the case of municipal implementation of active labour market policy in Denmark’’, Working Paper 2003:4, Department of Economics, Politics and Administration, Aalborg. Bredgaard, T., Larsen, F. and Møller, L.R. (2005), ‘‘Contracting out the Public Employment Service in Denmark: A quasi-market analysis’’, in Bredgaard, T. and Larsen, F. (Eds), Employment Policy from Different Angles, DJØF Publishing Copenhagen, Copenhagen, pp. 211-33. Brodkin, E.Z. (2005), ‘‘Towards a contractual welfare state: The case of work activation in the United States’’, in Sol, E. and Westerveld, M. (Eds), Contractualism and Employment Services. A New Form of Welfare State Governance, Kluwer Law International, The Hague, pp. 73-101. Bruttel, O. (2005), ‘‘Contracting-out and governance mechanisms in the Public Employment Service’’, Discussion paper 2005-109, Wissenschaftszentrum, Berlin. Bruttel, O. and Sol, E. (2006), ‘‘Work first as a European model? Evidence from Germany and The Netherlands’’, Policy and Politics, Vol. 34 No. 1, pp. 69-89. Considine, M. (2001), Enterprising States – The Public Management of Welfare-to-Work, Cambridge University Press, Cambridge, MA. Considine, M. (2005a), ‘‘The reform that never ends: quasi-markets and employment services in Australia’’, in Sol, E. and Westerveld, M. (Eds), Contractualism and Employment Services – A New Form of Welfare State Governance, Kluwer Law International, The Hague, pp. 41-71. Considine, M. (2005b), ‘‘Steering, efficiency and partnership: the Australian quasi-market for Public Employment Services’’, in Bredgaard, T. and Larsen, F. (Eds), Employment Policy from Different Angles, DJØF Publishing Copenhagen, Copenhagen, pp. 191-210. de Koning, J. (2004), The Reform of the Dutch Public Employment Service, SEOR, Rotterdam, Erasmus University Rotterdam. Hood, C. (1991), ‘‘A public management for all seasons’’, Public Administration, Vol. 69 No. 1, pp. 3-20.
Jordana, J. and Levi-Faur, D. (2004), The Politics of Regulation: Institutions of Regulatory Reforms for the Age of Governance, Edward Elgar, Cheltenham. Klausen, K.K. and Sta˚hlberg, K. (1998), New Public Management i Norden, Odense Universitetsforlag, Odense. Lane, J.E. (2000), New Public Management, Routledge, London. Larsen, C.A. and Andersen, J.G. (2004), Magten pa˚ borgen, Magtudredningen, Aarhus. Larsen, F., Abildgaard, N., Bredgaard, T. and Dalsgaard, L. (2001), Kommunal aktivering – mellem disciplinering og integration, Aalborg Universitetsforlag, Aalborg. Le Grand, J. and Bartlett, W. (1993), Quasi-Markets and Social Policy, Macmillan Press, Houndsmil. Majone, G. (1994), ‘‘The rise of the regulatory state in Europe’’, Western European Politics, Vol. 17 No. 3, pp. 77-101. Majone, G. (1997), ‘‘From the positive to the regulatory state: causes and consequences of changes in the mode of governance’’, Journal of Public Policy, Vol. 17 No. 2, pp. 139-67. Mosley, H. and Sol, E. (2005), ‘‘Contractualism in employment services: A socio-economic perspective’’, in Sol, E. and Westerveld, M. (Eds), Contractualism in Employment Services: A New Form of Welfare State Governance, Kluwer Law International, The Hague, pp. 1-21. OECD (1995), Governance in Transition, OECD, Paris. OECD (1997), ‘‘Making the Public Employment Service more effective through the introduction of market signals’’, Labour Market and Social Policy Occasional Papers No. 25, OECD, Paris. OECD (2001), Innovations in Labour Market Policies – The Australian Way, Organisation for Economic Co-operation and Development, Paris. Peck, J. (2001), Workfare States, Guilford Press, New York, NY. Productivity Commission (2002), Independent Review of the Job Network, Report No. 21, Ausinfo, Canberra. Sol, E. (2005), ‘‘Contracting out the Public Employment Service from a governance perspective’’, in Bredgaard, T. and Larsen, F. (Eds), Employment Policy from Different Angles, DJØF Publishing Copenhagen, Copenhagen, pp. 155-73. Sol, E. and Westerveld, M. (Eds) (2005), Contractualism in Employment Services: A New Form of Welfare State Governance, Kluwer Law International, The Hague. Struyven, L. (2004), ‘‘Design choices in market competition for employment services for the longterm unemployed’’, OECD Social, Employment and Migration Working Papers No. 21. OECD, Paris. Struyven, L. (2005), ‘‘The new institutional logic of Public Employment Services’’, in Bredgaard, T. and Larsen, F. (Eds), Employment Policy from Different Angles, DJØF Publishing Copenhagen, Copenhagen, pp. 175-91. Struyven, L. and Steurs, G. (2003), ‘‘Towards a quasi-market in reintegration services: First assessment of the Dutch experience’’, Australian Journal of Labour Economics, Vol. 6 No. 2, pp. 331-55. Struyven, L. and Steurs, G. (2005), ‘‘Design and redesign of a quasi-market for the reintegration of jobseekers: empirical evidence from Australia and The Netherlands’’, Journal of European Social Policy, Vol. 15 No. 3, pp. 211-29. Torfing, J. (2004), Det stille sporskifte i velfærdsstaten – en diskursteoretisk beslutningsprocesanalyse, Magtudredningen, Aarhus. Van Berkel, R. and Van der Aa, P. (2005), ‘‘The marketization of activation services: a modern panacea? Some lessons from the Dutch experience’’, Journal of European Social Policy, Vol. 15 No. 4, pp. 329-49.
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Further reading Barbier, J.C. (2005), ‘‘Embedding contractualism in national institutions: performance contracts in the French Public Employment Service’’, in Sol, E. and Westerveld, M. (Eds), Contractualism and Employment Services: A New Form of Welfare State Governance, Kluwer Law International, The Hague, pp. 255-80. European Employment Observatory (2004), European Employment Observatory – Review: Spring 2004, The European Commission, Brussels. Finn, D. (2005a), ‘‘Contracting out and contestability: modernising the British Public Employment Service’’, in Bredgaard, T. and Larsen, F. (Eds), Employment Policy from Different Angles, DJØF Publishing Copenhagen, Copenhagen, pp. 233-52. Finn, D. (2005b), ‘‘The role of contracts and the private sector in delivering Britain’s ‘‘Employment First’’ welfare state’’, in Sol, E. and Westerveld, M. (Eds), Contractualism and Employment Services: A New Form of Welfare State Governance, Kluwer Law International, The Hague, pp. 101-19. Konle-Seidl, R. (2005), ‘‘New delivery forms of employment service in Germany: a mixed publicprivate model’’, in Sol, E. and Westerveld, M. (Eds), Contractualism and Employment Services: A New Form of Welfare State Governance, Kluwer Law International, The Hague, pp. 187-208. Simonin, B. (2005), ‘‘Formal contracting with providers in France: a technical approach with higher political stakes today’’, in Sol, E. and Westerveld, M. (Eds), Contractualism and Employment Services. A New Form of Welfare State Governance, Kluwer Law International, The Hague, pp. 281-306. Struyven, L. and Verhoest, K. (2005), ‘‘The problem of agency at organisational level and street level: the case of the Flemish Public Employment Service’’, in Sol, E. and Westerveld, M. (Eds), Contractualism and Employment Services: A New Form of Welfare State Governance, Kluwer Law International, The Hague, pp. 325-58. Corresponding author Thomas Bredgaard can be contacted at:
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The individual job seeker in the sphere of contractualism
Individual job seeker
Els Sol and Mies Westerveld Hugo Sinzheimer Institute, University of Amsterdam, Amsterdam, The Netherlands
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Abstract Purpose – Activation policies in most Western countries have discovered the private tool of contract and in a short period of time the contract has penetrated the whole domain. Among the forerunner countries contracts in different forms, collective as well as individual, have become the central steering instrument. The purpose of this article is to shed some light on what this change can and does entail for the individual job seeker on benefit. Job seekers are no longer expected to passive undergo treatment but expected to contribute actively to one’s own return into the labour market. The main rationale behind this shift is the idea that working with contracts increases the level of involvement and, therefore improves results over time: results in terms of better motivated clients, more focused policymakers, providers and frontline workers delivering client-orientated services. Design/methodology/approach – Using qualitative research the article maps the different types of contracts using empirical material from eight countries. Findings – The findings are presented in the form of the practical potentials and pittfalls of contracts for the individual. Originality/value – A major added value is the multidisciplinary approach used by the authors; the phenomenon of contracts is analysed from a social science and a legal point of view. Keywords Employment, Employment contracts, Governance, Europe Paper type Research paper
Introduction In the last decade the delivery of services deriving from public policies to protect the unemployed in modern welfare states has undergone a conspicuous change. Contracts – not standard legislation – are becoming the norm in public employment services (PESS), containing reintegration services (vocational training, etc.), job brokerage and benefits, and collective dictates are giving way to a greater level of individually shaped responsibilities. The main rationale behind this shift is that working with contracts increases the level of involvement and therefore improves results over time: results in terms of better motivated clients, more focused policymakers, providers and frontline workers delivering client orientated services. In an effort to achieve greater efficiency and effectiveness in the provision of employment services, many governments have opened the door to their traditional hierarchically structured employment services and have embraced ideas of contestability and marketability. Increasingly, the central state is withdrawing from direct provision of employment services instead favouring market orientated forms of intervention (Mayntz, 1983; Schmid et al., 1996). Sometimes it seems as though the rapid spread of contractualism over so many countries is more often induced by discontent due to poor performance of the old system than by the virtues in practice of the new. All new types of contractual forms of governance have one aspect in common: they appear to undermine the function of public management in employment services. On the other hand, they may merely serve to provide it with a different, less inclusive and therefore more workable content. Already from the phrasing of the question one can detect that the high expectations that some governments have are not automatically shared by all. In the public sector, the process of contractualisation has a number of negative consequences in terms of what was
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previously stipulated in uniform legislation. For example, when public tasks are contracted out to third parties, public accountability and responsibility diminish. Greater discretionary leeway for social security administrative bodies and reintegration companies could further jeopardise the vulnerable position of job seekers. Moreover, is it realistic to expect the unemployed to enter into negotiations as contract partner with various organisations in a market-like policy network, which itself is tied together on the basis of contracts? How evenly matched are such contract parties, and what conditions can the former set? The concept of greater individual responsibility runs the risk of collapsing under such a structure. At the same time, it is evident that at the level of horizontal contracting – between agencies (for-profit and non-profit) and governments – roughly the same mechanisms are at play as in the case of the vertical plane of contracting or micro-contracting between agencies and clients. Governments of various countries have introduced reintegration contracts between the government as a benefit provider and the citizen – usually referred to as ‘‘client’’ – as both a benefit recipient and a job seeker to be reintegrated. Once more, this contract structure raises a number of fundamental questions. Is what is referred to here as a reintegration contract genuinely a reciprocal agreement? If so, what does it contribute, or does it potentially detract from the statutory relationship under social security? Strikingly, this question appears to enjoy little or no consideration in countries in which this approach has been taken. It is invariably set aside as being irrelevant, under the pretext that such questions are not important as long as the approach works. Comparisons with other, likewise quasi-contracts such as the naturalisation of job penalty contracts, spring to mind in this context. But whether setting aside such questions is justifiable or perhaps even desirable in the long run is indeed an entirely different matter. These new approaches ultimately directed towards the job seeker include the use of all kind of – yet unmapped – contracts. In a recent eight countries covering, multidisciplinary research into this phenomenon of what we call contractualism, we distinguish three types of contracts: (1) contracts between public and private actors (providers), (2) administrative (public) service contracts, and (3) individual contracts (Sol and Westerveld, 2005). Contractualism refers to the increased use of contracts as a key tool in the regulation of public relationships (Yeatman, 1995, 1997). With this rapidly spreading use of contracts as a key tool in service delivery, the landscape of PESs has been changing radically. The question arises: can this tool work? In this article we focus on answering this question for the individual contract, as a specification of the relation of the modern enterprising state with the job-seeking citizen. First we will determine the individual contract amid different types of contract and point to key elements. Using the material from different countries we will make a distinction in two major types of client contracts, their nature, and present some of the potentials and pitfalls involved. Thereafter the individual contract type will be discussed from a legal perspective in order to discern what different (legal/non-legal) meanings can go under the banner of individual contract. In the concluding sections we will return to the question of whether more involvement will indeed bring forward better results and the reciprocity of the obligations involved.
The individual job seeker meets with different types of contracts There is a long history of outsourcing employment services by PESs – as a ‘‘niche’’ in a world of hierarchical coordination – motivated mainly by management principles (lack of capacity for specialised services). What is new is that currently, in a number of countries, central policy makers are using contracting as a policy tool to construct new institutional relationships between governments, public servants, providers and clients. Once the scale of contracting reaches a certain point of transformation, previous relations in the domain of employment services are restructured. In theory, traditional PES bureaucracy gives way to forms of market coordination as new forms of governance, in which public officials no longer understand their work as following rules and procedures but come to organise their activities and choices through prices and outcome payments. Based on public and public/private models of PES provision, and combined with a double actor perspective (individual/collective), three important contract types are discerned (Mosley and Sol, 2005). Administrative service contracts Public contracts include performance agreements between the government (or responsible ministry) and the PES or between the employment service and its regional units as well as contracts governing the devolution of responsibilities from the national to state or provincial governments in federal systems, or to municipalities. These contracts within the public sector are also referred to as performance agreements (Davies, 2001). As they are usually not legally binding arrangements, they are ‘‘quasicontracts’’. There are two subtypes of contracts discernable. The first subtype includes contracts between the government (or responsible ministry) and the PES (or benefit agency) or between the employment service and its regional units. A second subtype includes public contracts governing the devolution of responsibilities from the national to state or provincial governments in federal systems, or to municipalities. Market-based service provider contracts Market-based contracts are contracts by the government with private (for-profit and not-for-profit) service providers based on contracting out. Public actors can also be involved but on the same conditions, they act as a private actor. The PES organisation, the former in house service provider, sometimes acts as one of the service providers. Tenders can be open to all or not, different combinations are possible. Competitive tenders can be combined with procurement. For example, in Australia the government contracts out partly on the basis of competitive tender, partly on the basis of procurement; part of the budget is for contractors with good performance ratings, which are reoffered contracts in the next contract cycle. Client contracts Client contracts are contracts between (public or private) service providers or benefit agencies and individual clients, usually setting forth the terms of reintegration agreements and their rights and duties. For example, contracts between counsellors in the PES or private providers and individual job seekers belong to this contract type. In a ‘‘contracting’’ subtype eligible clients can receive a ‘‘voucher’’ which can be spent only on training or on placement or both. The trend towards the use of contract forms in welfare-state governance is in practice extremely diverse. Countries develop their own distinctive profile, which is
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related to path dependency, i.e. historical traditions, cultural norms and established practices (Rhodes, 1998). Most advanced systems in the social policy field, including the eight countries involved, actually constitute a hybrid made up of market and administrative instruments. Individual contracts do exist separately in a hierarchical system as well as as part of a broader contractualised delivery system.
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Mapping client contracts using characteristics in eight countries Shifts where clients become ‘‘contracting parties’’ have been underway for some time. At the end of the 1980s, for example, client contracts were introduced within the framework of the social security system as a measure to address job seekers in a more individual manner in the United States, Australia and various West European countries. The current growth of vouchers and client contracts reflects that responsibility for the conduct of life is increasingly transferred also to individual actors. Client contracts are practiced in most countries under several different names: Job Seekers’ Contract, Job Seekers’ Arrangement, Individual Action Project and Personal Action Plan. Two types of ‘‘client’’ contracts ‘‘Client contract’’ refers to a variety of arrangements, which – using material from Australia, United States, United Kingdom, The Netherlands, Germany, France, Belgium and Finland – we were able to narrow down to two types: (1) client contract as a collective term for top – down arrangements and (2) as a collective term for reciprocal vouchers and hybrids like individual reintegration contracts, where the client can choose his provider and plan but ultimately the case manager has the veto power to decide where to spend the money and how. In some countries the job seeker or as he/she is generally referred to: the client – is granted the money that is considered necessary for his reintegration. This can take the form of a grant to the job seeker or, more indirectly, as a voucher which can be cashed at the counter of a service provider. Both instruments give the job seeker an explicit claim on public finding, allowing him to spend it only for a particular service, but with a wide range of potential suppliers. As such, they contribute to client empowerment and provide an incentive for the market of employment services to improve their products. In practice, however, explicit vouchers in the domain of employment services are rare. Australia has accounts but to be administered by the provider, and so has the UK (Employment Zones), the Netherlands experimented with a personal reintegration budget and uses a voucher hybrid called individuele re-integrateiovereenkomst (individual employment services agreement) (IRO), while Germany introduced placement and training vouchers. The more common meaning of the word ‘‘client contract’’ refers to the document the job seeker must sign in order to receive a social benefit. In this sense contract is no more than an instrument to measure and to control the willingness of the person on benefit to cooperate to find a job, e.g. in the UK or in the USA (see Brodkin, 2005; Freedland and King, 2005). Smart tool? Theoretically, there are sound arguments in favour of contractualising the relationship with job seekers. An individual contract offers more options for customisation; a contract sends out the implicit message that government is taking job seekers
seriously, that their wishes and needs count. But that by the same token, something is expected of them. Sitting back and waiting until something suitable comes along will not suffice. In other words, contractualisation with the individual would appear to reduce the moral hazard that the person, on whose reintegration a lot of effort and resources are being spent, may not be interested in the actual end result. Client contractualism seems a smart management method, also from a more practical viewpoint. A clear and well-defined job seeker contract can be a useful tool for case management and sanctioning by the frontline worker. Customised arrangements are more effective than general rules in providing PES with an outline of ways to help job seekers reintegrate. Moreover, customised arrangements provide a better justification for sanctions than broadly and impersonally formulated commitments. However, the issue of sanctions is not without controversy. In Finland, where the individual activation plan is seen as a ‘‘contract between the state and the individual’’, many social workers were critical of the sanction approach and therefore reluctant to use them (Sakslin and Keskitalo, 2005). In contrast, client contractualism in Anglo-Saxon countries is predominantly ‘‘illiberal’’, with coerciveness and oppressiveness as integrated elements of the freedom of contract (see Brodkin, 2005; Freedland and King, 2005). This debate touches on an inherent paradox of contractualism within PES. After all, social security is hierarchical, creates rights and imposes obligations, while contracting suggests a horizontal relationship and freedom of action (see legal paragraph). Dispute In principle, the contractual arrangement can be beneficial to both parties. For the jobseeker, its advantage lies in the fact that a well-formulated contract forces the service provider to be explicit in its expectations towards the client. A contract may provide for personal choice, for instance – in a privatised setting – between several service providers (Le Grand, 2003). There are also grounds for criticising this use of contracts. For instance, Handler regards such contracts as just an attempt to put a human face on changes, intended to turn the welfare state from a passive provider of income support to individual activation. The notion that government can help the socially excluded through contracts based on individual needs is, in his opinion, a myth (Handler, 2002, p. 40). Clearly there are critical questions to be answered and even more so in countries where employment services are privatised, e.g. one might wonder whether the arrangement is a two or a three party contract. More in general questions are involved, for instance, regarding enforceability, accountability, or the extent to which the contracts are voluntary. And how do client contracts relate to the legal safeguards embedded in the welfare and social security law? These and other legal questions will be dealt with in the next paragraph. A legal perspective on the nature of job seeker contracts Client contracts can regulate all kinds of relations: between the individual and the government, the PES, or another provider. In the relationship between job seeker and PES, a job seeker contract is non-contractual. In countries where client contractualisation is ‘‘illiberal’’, even the qualification of quasi-contract seems misplaced. In those situations where the job seeker has to sign his action plan (‘‘or else’’), where he has little to say about its contents and the plan contains nothing but orders that have to be followed, the resemblance to a contract appears too flimsy even for the qualification quasi-contractual. However, in countries where the activation plan is considered ‘‘a contract between the state and the individual’’, where the social worker sees to it that the plan is not signed
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without the client’s consent (Sakslin and Keskitalo, 2005), the qualification quasicontractual is fully deserved. Ultimately, however, the measure of its legal status depends on its contents (mutuality or even reciprocity of the arrangement) and its legal embeddedness. The issue becomes more topical once employment services are privatised. Contrary to PES and the job seeker, private employment service providers and the job seeker are not in a pre-arranged relationship with each other. Moreover, both are free to choose whether or not to enter into the relationship: the provider can refuse this client; the job seeker can request another provider. Under these circumstances, the arguments why the arrangement is non-contractual are less valid: the document can achieve a legal contract status. Privatisation has introduced a new dimension to the contract debate. In legal terms, privatisation brings a change in the contract relationship; in addition to or instead of the public administrator/principal, a private service provider joins the players as a potential contracting party. Job seekers thus become clients or ‘‘customers’’ of providers who are paid to serve them. This may impact on both the outlook and the legal relationship of both parties. At the same time, privatisation stimulates the debate about the job seeker’s right to have a say. In most countries where private service providers entered the scene, this fact appears to have been an important driving force behind client-oriented instruments such as vouchers, IROs and personal budgets (see Considine, 2005; Westerveld and Faber, 2005; Sol and Westerveld, 2006; Bruttel, 2005). Vouchers and personal budgets do not so much create a contract relationship with the job seeker, as they create a relationship between the service provider chosen by the job seeker and the public financier. Just as with a regular employment service provision contract, the job seeker is not a contracting party or principal; at most he can claim the title ‘‘quasi-principal’’ because of his involvement in the choice of provider. Naturally, after making the individual-oriented service provision contract, a job seeker contract can also be made between the job seeker and the service provider selected by the job seeker, but this is in principle separate from the financing-oriented service provision contract. All in all, the country studies show two ways of dealing with the paradox between the vertical relationships in social security and the horizontal relationship in contracts: either by abandoning the mutuality of contractualisation (‘‘illiberal contracts’’), or by loosening the top–down character of employment services. Handler convincingly discredits the alleged advantages of a hierarchical job seeker contract. However, this has not demonstrated the failure of the instrument as such. Indeed, the conclusion should read that the focus of the job seeker contract has stood in the way of an exhaustive exploration of the opportunities inherent to the model (Ebsen, 2005). The perspective was always aimed at guiding the job seeker. Contracting, however, is – just as guiding people into work – a bilateral affair: it takes two to tango. Translated in terms of moral hazard: the neglect, disinterest, lack of involvement or the predominant focus on easy clients on the part of the provider resulting, for example, in parking, constitute just as big a risk for the financing government as all the characteristics on the part of the person who has to be activated. This risk can be reduced by a carefully monitored contract practice with the client. Such a practice forces the person drafting the document to record, with the other party looking on over his shoulder, what has been agreed between them, including the way in which they believe they will adhere to the agreements. This increases accountability; building blocks are presented for penalising, on the one hand, the defaulting job seeker, and, on the other hand, the defaulting social worker or service provider. Such model-inherent opportunities also
exist in an exclusively public context. Nevertheless, little attention has been paid to this so far: the emphasis was always on what the job seeker should do and promise. Potentials of privatisation Privatisation has the capacity to eliminate this blind spot, the emphasis that is/was always on what the job seeker should do and promise. First of all, privatisation entails that more actors look at what the job seeker has to sign and what he receives back in terms of quality of services. Secondly, the job seeker contract changes in character within the relationship with a private provider. Instead of a quasi-contract, it can become a true legal contract, with all concomitant legal resources that accompany contracts. We do not seek to argue in this respect that job seekers should bring their service provider to court to demand compensation or performance of the contract. Job seekers benefit more, both in a public and in a private context, from an accessible complaints procedure, or from the option of bringing in an impartial third party in the event of a difference of opinion (see Ebsen, 2005). However, for client organisations such a (trial) case against, e.g. a provider who systematically ignores his agreements with the job seeker, can be a real option, and, moreover, one which, from government’s perspective, can help to keep the market sharp. In the third place, privatisation has put the issue of consumer’s choice on the agenda. It cannot be denied that vouchers and own budgets have a predominantly presumed added value. In their case, the assumption is that job seekers that make conscious choices will stimulate client-oriented market competitiveness and thus the quality of the services. There are at least two hurdles which stand in the way of realising that promise. The first lies in the uniformity of the market, and in its lack of transparency in terms of employment services. Without a varied range of services and without good information on the options available, this right of choice is at risk of the same type of market abuse as that which Brodkin described for the free market of employment services in Chicago (Brodkin, 2005): companies that promise unsuspecting job seekers pots of gold and then leave them empty handed. The second hurdle is a political hurdle: with privatisation operations the client perspective is often the final piece of the budget (Considine, 2005). The chance that the client’s right to choose will fall by the wayside at the first sign of market failure or the first political change of the guard remains thus far from imaginary. Dancing alone After finishing the book Contractualism in Employment Services in 2005 we presented the results in the Netherlands to some 80 line managers and frontline workers from municipal social services. In The Netherlands, welfare is decentralised to communities since January 2004 and since that time, municipalities are made financially fully responsible for welfare. We used the presentation to check how they currently perceive the idea of client contracting and client orientation. (Sol and Westerveld, 2006) First, we designed and presented three theses on job seeker’s say, each covering a different angle – ‘‘ideology’’, ‘‘pragmatic’’ and ‘‘paternalistic’’ – to get a clearer vision of their perception of client orientation. The first angle sees voice as a value in itself, the second looks at voice as a means to greater effectiveness and efficiency, while the third sees voice/say over reintegration as inefficient per se. The first proposition was ‘‘The client should be entitled to a maximum discretion on the content of his or her job seekers agreement’’. Under the heading of ‘‘pragmatic’’ the proposition ran like ‘‘The client should be able to have a say in his own agreement, because this contributes to greater effectiveness of the services
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delivered’’. The paternalistic proposition was ‘‘Freedom of choice creates too much room to manoeuvre for people to run after one’s own hobbies and thereby creates inefficiencies’’. It turns out that the pragmatic point of view is by far the most favourite, among line managers as well as frontline workers. Participation stands for a positive approach of the client, starting from respect. Both stress the importance of intrinsic motivation for clients, especially those with a large distance from the labour market, but line managers want more decision power to remain in the hands of the case manager than the frontline workers themselves. A marked contrast is to be found between the line managers and frontline workers with regard to the third proposition. Part of the line managers adhere to the third proposition, for those clients that do not want to cooperate and for those that can reintegrate easily without further ado because of their better qualifications. The idea is that neither of both groups belongs at the counter of welfare. ‘‘Work first’’ is the motto, people should go and work as soon as possible. However, in this respect frontline workers make objections. One of them threw the question as to whether maybe reintegration fails more often due not to the private hobbies of the job seeker, but due to the fact the job seeker has to follow the private hobbies (written in the collective contracts with providers) of welfare units or individual case managers. Secondly, we tried to figure out what they thought their own rights and responsibilities vis-a´-vis the individual job seeker are casu quo (c.q.) should be. On the basis of the discussion, we concluded that the municipal frontline worker seems to have definitely abandoned the paternalistic vision, in which people on benefit are regarded as passive persons or objects. They are enthusiastic about making rights and responsibilities (sticks as well as carrots) more explicit. However, they seem unaware of their responsibilities towards the individual job seeker. As it turns out, this element of reciprocity has not yet penetrated in the perception of those who de facto give shape to the new contractual way of thinking. Following the response in this workshop workers are inclined to give more freedom to the job seeker, albeit under certain conditions. The general opinion of the majority is that giving clients a say makes them more motivated and content with the service delivery. Once the client himself can give shape to his agreement, he/she gets more involved and the workers are convinced that thereby the chance of success in terms of reintegration back into the labour market increases. Nonetheless, one can ask whether this is a correct coupling. Literature warns us against unquestioningly equating involvement and contentment with success (Kelly, 2005). On the other hand there is some evidence to support this vision. Recent research into the labour market position of unemployed people in The Netherlands who used the IRO shows that indeed greater involvement/say by the IRO instrument does bring (slightly) better results in terms of more placements in the labour market (APE, 2006). Concluding remarks Activation and protection are uneasy bedfellows; an activating welfare state appears a contradiction in terms. The individual contract concept evidences this uneasy relationship. In virtually all countries where this has occurred, the way in which it was fleshed out was predominantly hierarchical, without the reciprocity that is inherent to contracts. Rather, to justify the contract approach, the focus was on the ‘‘counterperformance’’ for the client, which from an international/treaty law perspective is not true counter-performance: his right to social benefits. Research into the instrument of IRO has demonstrated that the rationale that working with individual contracts increases the level of involvement of the individual job seeker and thereby increases the
number of placements, seems to be working. However, more research into this relationship is needed. Privatisation put both the friction between activation and protection and the contract – or at least the relationship – with the job seeker on the agenda. Privatisation sharpened the dilemma for national welfare states that job seekers are more than packages that can be shifted from ‘‘a’’ to ‘‘b’’, not only from a perspective of human rights, but also from the perspective of effectiveness. Like the proverbial horse, one can lead job seekers to water, but one cannot force them to drink. Getting them to take that drink requires motivation and therefore providers/consultants who can invoke that motivation. Contractualisation forces the (public or private) case manager to become more specific about his own actions towards the individual job seeker. Contractualisation sets the spotlights not only on the individual job seeker, but also on the case manager and his/her (lack of) accomplishments towards this person on benefit, forcing the frontline workers to come out of the shadows, where many of them for so long have safely sheltered. Note 1. Countries are Australia, The United States, United Kingdom, The Netherlands, Germany, France, Belgium and Finland. References APE (2006), Derde voortgangsrapportage IRO, APE, Den Haag. Brodkin, E.Z. (2005), ‘‘Towards a contractual welfare state? The case of work activation in the United States’’, in Sol, E. and Westerveld, M. (Eds), Contractualism in Employment Services: A New Form of Welfare State Governance, Kluwer Law International, The Hague, pp. 73-101. Bruttel, O. (2005), ‘‘New private delivery arrangements in Germany: an initial evaluation using new institutional economics’’, in Sol, E. and Westerveld, M. (Eds), Contractualism in Employment Services: A New Form of Welfare State Governance, Kluwer Law International, The Hague, pp. 209-31. Considine, M. (2005), ‘‘The reform that never ends: quasi-markets and employment services in Australia’’, in Sol, E. and Westerveld, M. (Eds), Contractualism in Employment Services: A New Form of Welfare State Governance, Kluwer Law International, The Hague, pp. 41-73. Davies, A.C.L. (2001), Accountability: A Public Law Analysis of Government by Contract, Oxford University Press, New York, NY. Ebsen, I. (2005), ‘‘Contracting between social services and their clients in the German concept of ‘Foerdern und Fordern’’’, in Sol, E. and Westerveld, M. (Eds), Contractualism in Employment Services: A New Form of Welfare State Governance, Kluwer Law International, The Hague, pp. 231-55. Freedland, M. and King, D. (2005), ‘‘Client contractualism between the employment service and jobseekers in the United Kingdom’’, in Sol, E. and Westerveld, M. (Eds), Contractualism in Employment Services: A New Form of Welfare State Governance, Kluwer Law International, The Hague, pp. 119-39. Handler, J. (2002), ‘‘Myth and ceremony in workfare: rights, contracts, and client satisfaction’’, School of Law Research Paper No. 02-21, UCLA, Los Angeles, September. Kelly, J.M. (2005), The dilemma of the unsatisfied customer in a market model of public administration, PAR, Vol. 65 No. 1, pp. 76-84. Le Grand, J. (2003), Motivation, Agency and Public Policy: Of Knights and Knaves, Pawns and Queens, Oxford University Press, Oxford.
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Mayntz, R. (Ed.) (1983), Implementation politischer Programme II. Ansa¨tze zur Theoriebildung, Westdeutscher Verlag, Opladen. Mosley, H. and Sol, E. (2005), ‘‘Contractualism in employment services’’, in Sol, E. and Westerveld, M. (Eds), Contractualism in Employment Services: A New Form of Welfare State Governance, Kluwer Law International, The Hague, pp. 1-21. Rhodes, R. (1998), ‘‘Understanding governance: comparing public sector reform in Britain and Denmark’’, University of Copenhagen, Copenhagen, Inaugural lecture, 24 November. Sakslin, M. and Keskitalo, E. (2005), ‘‘Contractualism in Finnish activation policy’’, in Sol, E. and Westerveld, M. (Eds), Contractualism in Employment Services: A New Form of Welfare State Governance, Kluwer Law International, The Hague, pp. 359-83. Schmid, G., O’Reilly, J. and Scho¨mann, K. (Eds) (1996), International Handbook of Labour Market Policy and Evaluation, Edward Elgar, Cheltenham. Sol, E. and Westerveld, M. (Eds) (2005), Contractualism in Employment Services: A New Form of Welfare State Governance, Kluwer Law International, The Hague. Sol, E. and Westerveld, M. (2006), ‘‘Zeggenschap voor de client! Ja natuurlijk?’’ (‘‘A say for the client! Yes of course?’’), Sociaal Bestek, maartnummer. Westerveld, M. and Faber, K. (2005), ‘‘Client contracting in social security in The Netherlands’’, in Sol, E. and Westerveld, M. (Eds), Contractualism in Employment Services: A New Form of Welfare State Governance, Kluwer Law International, The Hague, pp. 167-87. Yeatman, A. (1995), ‘‘Interpreting contemporary contractualism’’, in Boston, J. (Ed.), The State Under Contract, Bridget Williams Books, Wellington, pp. 124-39. Yeatman, A. (1997), ‘‘Contract, status and personhood’’, in Davis, G., Sullivan, B. and Yeatman, A. (Eds), The New Contractualism?, Centre for Australian Public Sector Management, Griffith University, Nathan, pp. 39-56. Further reading Finn, D. (2005), ‘‘The role of contracts and the private sector in delivering Britain’s ‘‘Employment First’’ welfare state’’, in Sol, E. and Westerveld, M. (Eds), Contractualism in Employment Services: A New Form of Welfare State Governance, Kluwer Law International, The Hague, pp. 101-19. About the authors Els Sol is Associate Professor at the Hugo Sinzheimer Institute of the University of Amsterdam. She is a sociologist and geographer. Her areas of expertise include comparative labour market policy reform, especially the consequences of privatisation of employment services, governance and implementation research of labour market and welfare state institutions as well as atypical labour. Since the 1990s she participates in international networks, such as on transitional labour markets network (Translam) and reform of employment services (RESQ) and as an advisor for the LEED/ OECD. Els Sol is the corresponding author and can be contacted at:
[email protected] Mies Westerveld is Associate Professor of Labour Law at the Hugo Sinzheimer Institute of the University of Amsterdam. She wrote her PhD on the evolution of old-age and death pension schemes in social security. Her publications cover many aspects of social security legislation, such as sickness and disability schemes, and the place of care within a system of social insurance. At the moment she is focusing on the legal consequences of privatisation in full or in part of what has been a public insurance scheme. Her interest in this topic is political as well as scientific: since 2003 she has been a member of the Dutch House of Lords for the Social Democratic Party (PvdA). To purchase reprints of this article please e-mail:
[email protected] Or visit our web site for further details: www.emeraldinsight.com/reprints
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Emergence of new modes of governance in activation policies: Czech experience Toma´sˇ Sirova´tka, Pavel Hora´k and Marke´ta Hora´kova´
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Faculty of Social Studies, Masaryk University, Brno, Czech Republic Abstract Purpose – The paper deals with the question to what extent implementation conditions influence the profile of activation policies in the Czech Republic. In this way, it helps to clarify more general questions: how are broader objectives of these policies specified at the bottom level of implementation and why activation policies differ among countries, although guided by similar general objectives and principles. Design/methodology/approach – The findings are based on implementation case studies carried out at several local labour offices during the pilot stage and later during the routine stage of implementation of Individual Action Plans (IAPs). Findings – The paper shows that in the pilot stage of IAPs, the employability approach of enforced activation originated from the top-down and was adopted at the local level; however, in a fragmented way due to unfavourable implementation conditions (above all poor staffing and a lack of activation programmes). It follows from these very conditions that, in the routine stage, the programme has been dying away, despite being supported by legislation and programme documents. On the other hand, processes of institutional learning have been initiated owing to IAPs and, with the availability of new policy opportunities at the local level (brought about with projects funded from the ESF), policy coalitions and activation policies emerge from the bottom-up, giving rise to another model: capability approach of inclusion through participation. Practical implications – The findings are signalling to policy makers the necessity to control the implementation conditions at the national, as well as local level and to take the bottom-up processes of policy re-formulation into consideration. Originality/value – The analysis of the contradictions between the levels of policy-making and of the volatility of implemented policies emerging from specific implementation conditions represents the original contribution of the study. Keywords Employment, Czech Republic, Public policy, Learning Paper type Research paper
Introduction The welfare state reforms, related to changes that are under way in (post)modern society[1], show similar tendencies and are grounded on similar principles across various countries, despite variations in scope and content. The promoted principles (incorporated also in the field of employment policy in the European Employment Strategy) include a reviewed balance between rights and obligations, emphasis on employment, activation policies, the conditionality of rights, contractualisation (between the state and other welfare state agents, and between institutions and clients), individualisation, decentralisation and localisation of policies, pluralisation of actors, and new forms of governance accentuating indirect methods of influence, co-operation, and partnership (cf. Giddens, 1998; Mosley and Sol, 2001; Van Berkel and Hornemann Møller, 2002; Serrano Pascual, 2004; Van Berkel and Valkenburg, 2007; and others). This study was written with the support of the Ministry of Education of the Czech Republic (MSM 0021622408 Social Reproduction and Social Integration).
International Journal of Sociology and Social Policy Vol. 27 No. 7/8, 2007 pp. 311-323 # Emerald Group Publishing Limited 0144-333X DOI 10.1108/01443330710773881
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Welfare state reforms in countries undergoing a market transition (including the Czech Republic) represent a deeper paradigmatic shift than elsewhere, particularly at the level of goals and principles that guide public policies (cf. Offe, 1996; Ferge, 1997; and others). On the other hand, the implementation of policies pursuing these goals is largely a product of the national context and implementation conditions, and that is in many respects rather different from the situation in the EU-15 countries. This paper deals with the question to what extent implementation conditions (at the national and local level) influenced the profile of activation policies in the Czech Republic. In agreement with variable clusters which, according to van Meter and van Horn (1975), affect the ‘‘performance’’ of public policy, we pay attention to contextual factors such as policy goals as formulated at the national level and implementation conditions, i.e. the legal and institutional framework, and resources available (financial, personal, power and influence, and organisational culture). Due to the fact that the policy process involves both policy implementation (a top-down approach) and policy formation (a bottom-up approach) (cf. Sabatier, 1986) we are also concerned with the question how the influence of implementation conditions is mediated through the interplay of top-down and bottom-up processes. In these processes the distinct loci in the policy-making process, that is the levels of governance – the political/ administration system, institutional relations and the street level (cf. Lester and Goggin, 1998; Hill and Hupe, 2002) – may produce contradictory strategies and policies due to both ambiguity of goals and/or contradictions between goals and specific implementation conditions. Implementation is a quite complicated process that does not necessarily lead to the implementation of policy, but rather to the redefinition of goals and reinterpretation of outcomes, that is to evolution (Majone and Wildavsky, 1979; Lane, 1987). At the governmental level, the content of policy is rarely defined once and for all (Meyers et al., 1996). Local actors, particularly street-level bureaucrats, are therefore always given a certain discretion, which makes them important, if not the most important, actors in the process of policy implementation (e.g. Lipsky, 1980, 1991; Palumbo and Callista, 1990; Riccucci, 2005). Experiences with the public policies indicate that ‘‘experimental implementation’’ of the policy communities (Matland, 1995), sensitive to contextual conditions as well as to the goals and principles followed (and modified) at the local level, may enable quite viable and effective ‘‘programme mutations’’. These programme mutations are especially important, when policies initiated from the top-down do not match well the implementation conditions. In this connection, we pay attention to the process of learning that local actors experience in the course of implementing and realising activation policies. To examine the question about a link between implementation conditions and policy performance at the local level, we shall analyse the implementation of the most important methods of activation in the field of employment policy: Individual Action Plans (IAPs) and associated strategies of activation. In so doing we shall pay attention to two stages – first, the pilot phase (2003), and then the implementation phase at Local Employment Offices (three years later). At the first stage, we carried out case studies at four Employment Offices. At the second stage, we selected only those two where, in the initial phase, IAPs’ implementation appeared less developed in multiple respects, especially professional ones. In this way, we aimed to verify whether the dynamics of implementation and the process of institutional learning would accelerate in the
following phase – or, on the contrary, would continue to lag behind or even stagnate as a result of specific implementation conditions. Implementing activation in the Czech Republic The goal of ‘‘activation’’ and implementation conditions Legitimacy of the activation goal in the Czech Republic has been traditionally high. From the very outset of the transformation in the Czech Republic, new political and economic elites devoted great attention to improving work incentives in the formal labour market and to establishing the requirements of workforce flexibility, especially wage flexibility. In the late 1990s, the Czech Republic experienced a threefold rise in registered unemployment (from 3-4 per cent to 9-10 per cent, with the proportion of the long-term unemployed exceeding 40 per cent). The (growing) unemployment, concurrent with the booming grey economy, led to the formulation of a commonly shared assumption about a relatively significant proportion of ‘‘artificial unemployment’’. Another assumption, concerning the ‘‘passivity’’ of a substantial part of the unemployed, was supported by the fact that the replacement ratio of the aggregate of available social benefits in the Czech Republic (CR) is relatively high and comparable with most of the EU-15 countries (see OECD, 2004). Such assumptions infiltrated into the public policy discourse and influenced the approach towards policies of activation. In mid-2003, we conducted an exhaustive inquiry among 344 employees occupying decisive posts at all 77 Local Employment Offices. When interviewed, these directors and heads of key divisions defined as the most momentous cause of high unemployment ‘‘an insufficient motivation to take up a job as a consequence of low wages, but high social benefits’’ (the average answer on the scale from 1 to 7 was 2.29) (Sirova´tka et al., 2003). In the abovedescribed situation, Public Employment Services (PES) felt a strong need to increase pressure to activate the unemployed and prevent further growth in long-term unemployment. Guidelines on how to address the issue were supplied by the European Employment Strategy, specifically its Guideline 1 prevention and early activation which promotes the implementation of IAPs. With the forthcoming European Union (EU) membership (from 1 May 2004) and the country’s related preparations, the influence of the EU’s agendas was gaining in strength in the Czech Republic. Besides, this approach appeared to be a convenient and ‘‘inexpensive’’ instrument for eliminating passivity and benefit dependency or abuse. On the other hand, implementation conditions in terms of staff capacity and measures for activation were not favourable at all. The Czech Republic slightly increased active labour market policy expenditure between 1997 and 1999, but still did not reach the standard common in the EU countries – the expenditure came to about 0.2 per cent of GDP, which is twice or even four times less than in countries with a comparable unemployment rate (see OECD, 2005). This implies not only a very modest scope of active labour market policy measures (the number of the participants in all active labour market measures represents only a small fraction of unemployment figures – about 15 per cent), but also insufficient staff of Public Employment Services. The workload of 250-500 clients per member of staff who has direct contact with clients makes individual assistance in job search, as well as screening of job-search efforts problematic. Piloting the IAPs: matching objectives and conditions The decision was made to intensify activation of the unemployed and extend employment services’’ activity in this direction, with the aim to stop the growth in
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long-term unemployment. IAPs were implemented as a pilot project at 15 selected employment offices during the second-half of 2002 and during 2003. Local Employment Offices are given a high degree of discretion in the Czech Republic in designing and performing active labour market policies although they are fully dependent on the centre of PES in terms of finances and number of staff. Also in the case of IAPs implementation they were given considerable discretion in the choice of the implementation method, however, joint methodological consultations were held regularly. When formulating concrete objectives of IAPs, employment offices primarily accentuated increased responsibility, independence and pro-activity in job search (by way of illustration, one of the employment offices suggested to refer to IAPs as ‘‘Responsibility, Independence, Pro-activity’’), thus aiming above all to motivate the clients. The pilot project of individual activation greatly contributed to the processes of ‘‘learning’’ and ‘‘internal reorganisation’’ of the institutions’ operation, resulting in the broadening of opportunities for individual work. At most of the employment offices, the basic step was to separate office work (registration, and administration of benefits) from mediation and counselling. On the other hand it presented a heavy burden (workload) on the participating institutions. The original intention was to invite high numbers of the unemployed to participate in IAPs. However, most employment offices in locations with a high unemployment, where this goal was beyond the capacity of available staff, immediately deviated from the model. Given the limited staff, IAPs’ implementation was based on the principle of voluntary participation in the programme. The programme thus targeted those applicants who were assessed as having a bleak outlook in the labour market, but at the same time as people with a sufficient degree of motivation to secure effective co-operation. In other words, employment offices did not include those applicants in the experiment who were considered capable of finding a job by themselves. Secondly, applicants who were deemed ‘‘hard-to-place’’ by the mediatorscounsellors due to lacking social adaptability constituted another excluded group. This way of selection in fact caused that the programme did not fit well the original objective to activate those who are less motivated – as it was rather the motivated clients who signed the IAP. On average, an estimated 15 per cent of applicants, at most, from the cohort of potential participants – that is, of the specific category of the unemployed to which IAPs were addressed – signed the IAPs[2]. Emerging model of activation Considering implementation conditions, it is hardly surprising that the initial objectives were not always met by employment offices. Dealing with high numbers of clients or with more difficult cases was at most offices beyond the capacity, as well as the professional abilities of the mediators-counsellors. The elaborated and signed IAPs often seemed rather flat and formal: ‘‘there was hardly anything to write down’’. Anyway, the process of implementation made employment offices recognise that the successful accomplishment of the set goals lies in improving the intensity and quality of the individual work rather than in the formal signing of an IAP. One of them accentuated a professional individual approach and quality counselling for clients and achieved a steep improvement in this respect in the process of institutional learning, although only in relation to very small numbers of clients, given the limited capacities. Unlike those offices where hard-to-place clients were selected so as to be excluded from further interventions, this office concentrated precisely on this group, omitting the
other categories of applicants. It acted on the assumption that more apt applicants would find a job by themselves. Another Employment Office adopted a rather administrative and formal approach to the IAP, emphasising its contractual aspect. The two remaining offices were between the mentioned extremes, somewhat closer to the administrative approach. Professionalisation of working with clients seems to have advanced furthest where there was higher unemployment and lower number of other actors in the labour market concerned with the target group of the unemployed – and therefore possibly also a stronger pressure on institutional learning at the employment office. At the same time, there were also greater professional competencies of top-executives and counsellors for job-mediation at this employment office, and for that reason also a specific prevailing type of organisational culture (organic type contrasting with the mechanic one). We identified four distinct approaches towards IAPs’ implementation, as distinguished with respect to the type of organisational culture (according to Burns and Stalker, 1961) and the role of street-level bureaucrats (Scott, 1969; Harris, 1998; Vinzant and Crothers, 1998) – as outlined in Figure 1. Only one employment office of the four that we studied, came close to the ideal method (A) of IAPs’ implementation which best corresponds to the given methodology of individual work with the client as outlined by the European Commission (2000). This method is here referred to as the ‘‘counselling-mediating professional model’’. The other offices showed a variety of attributes in terms of the dimensions above, even bordering on such a manner of IAPs’ implementation whose properties could altogether be referred to as the ‘‘administrative-mediating bureaucratic model’’ (D). Despite the above-mentioned differences, the process of individual learning was
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Figure 1. Different models of implementing IAPs at four selected employment offices
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apparent at all employment offices. In the area of mediation and counselling, pressures intensified on improving the standard of management (defining the supervision of employees and divisions, and their mutual team co-operation), enhancing counsellors’ competencies in the field of individual and group work with clients (courses in communication skills and diagnostics, and courses increasing the understanding of the labour market), intensifying co-operation with employers (efforts to establish a reservoir of vacancies), encouraging mutual communication. If we interpret the above-characterised approaches using the terminology of activation models already described in the existing literature, it can be said that type D – the administrative bureaucratic approach – is strongly interlinked with the model of enforced participation (Van Berkel and Hornemann Møller, 2002) or employability approach (Bonvin and Farvaque, 2007), which insists mainly on individual responsibility and individual employability. It is associated with a culture of blame and prefers economic pressures and incentives. Since it does not pay much attention to individual clients’’ needs, while applying individual control, it can be regarded as a top-down approach. In contrast, the type A – professional approach corresponds well with the inclusion through participation model (Van Berkel and Hornemann Møller, 2002) or capability approach (Bonvin and Farvaque, 2007) which is focused on the clients’ choice of decent job opportunities, on collective responsibility and the clients’ ability/possibility to behave responsibly, where measures are tailored to clients’ individual needs thanks to their involvement in the policy-forming process. The prevailing model of activation associated with implementation of IAPs at the pilot stage can be defined as the employability approach of enforced participation, considering the primary emphasis on individualising the unemployment problem, on the client’s obligations, on a formal contract and pressures/incentives to intensify the job search. However, it was a rather weak version of the model of enforced participation, because it was applied on the basis of the clients’ voluntary decision and targeted to a small portion of them only. This model obviously emerged as a result of the specific context (individual responsibility as a prime goal) and specific implementation conditions (poor staffing in terms of numbers, competencies necessary for intensive individual counselling, and available scope of active labour market policies) which are inadequate to the goal of activation. Application of the administrative approach was not possible either, due to case-overload not allowing intensive permanent job-search screening. However, these conditions also modify the model in other respects, especially where the process of institutional learning was proceeding faster. Having selected more motivated clients (or having allowed self-selection of clients), who did often show certain handicaps, and in order to be able to manage these clients’ situation, Local Employment Offices had to individualise their approach, both towards the clients and towards employers’ needs and had created, with help of the creaming strategy, some room for it. This alteration of the designed programme corresponds to the capability approach of the inclusive participation model – but it was applied in a very limited scope because the freedom of choice available to both potential and actual participants in IAPs to enrol in the active programmes from which they could truly benefit, was, nonetheless, insufficient.
Developments of the activation strategy Changing context and implementation conditions In May 2004, the Czech Republic joined the EU. Alongside the generally legitimate goal of activating the unemployed, it has increasingly been in the interest of the political representation and public administration to adapt, at a symbolic or even practical level, to public political agendas of the EU to take full advantage of structural funds of the EU for the benefit of the country, thus gaining political support. Under these circumstances, the National Action Plan for Employment (NAPE) 2004-2006 was, at least in formal aspects, drawn up under a strong influence of the new European Employment Strategy guidelines announced in Brussels in 2003. Guideline 1 (prevention and activation) of the National Action Plan for Employment 2004-2006 therefore laid down that all employment offices should, beginning in 2004, only launch the IAP programme (First Opportunity) for unemployed people under 25 years of age, with the prospect of extending the offer to unemployed people over the age of 25 beginning in 2006 (New Start). Another important intention of the NAPE was to improve the offer of active employment policy measures by raising resources allocated to this sector by about 50 per cent between 2004 and 2006 (MLSA, 2004, p. 41) and further growth of more than another 50 per cent from the projects financed through the ESF. A new Employment Act came into effect in September 2004 (Za´kon/Act no 435/ 2004). It has established several changes in line with the enforced participation activation strategy – they aimed mainly at increasing administrative pressures on the unemployed and screening their job-search activities. Among others, employment offices have been obliged to offer an IAP to all applicants under 25 years of age. Participation is voluntary, but failure to comply with the IAP commitments can result in sanctioning the unemployed by striking them off the register (and discontinuing their unemployment benefit entitlement) for three months. Secondly, job-search incentives have improved: a stricter definition of a ‘‘suitable job’’ was applied (suitable are such jobs that last for longer than three months or even a shorter period of time in the case of long-term unemployed). On the other hand, the law permits the unemployed to retain their entitlement to unemployment benefits while having a temporary part-time job, as long as their earnings do not exceed half the minimum wage. Lastly, the law has introduced agency employment (according to a Dutch model). The overall transformation of established instruments only had a minor impact on the scope of active employment policy. The intended augmentation of resources laid down in the NAPE 2004-2006 clearly did not happen, nor did the enlargement of staff. On the other hand, beginning in 2004, new opportunities opened up for activation policies and for a more individualised approach to addressing unemployment at the local and regional level through projects of the ESF. These projects have the potential for improving the situation of the unemployed with accumulated handicaps: for what is common in the Czech context, subsidy per participant is relatively generous, and a chaining of measures is typically assumed: individual counselling and individual (balance) diagnostics – a motivation course – vocational training combined with work experience – a subsidised job. Especially important is the opportunity for gaining work experience with an employer. Routinisation of IAPs: matching objectives and implementation conditions Having been established in legislation, the top-down implementation of IAPs entered a routine phase in 2005. The main problem (the deficient counselling capacities) was to
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some extent eliminated by instituting the principle of voluntary participation and by allowing the purchase of individual diagnostics of the unemployed from external firms. Not even in the routine phase did the personnel capacities increase. On the contrary, the mediators’ workload has grown even bigger in consequence of them being newly charged with the task of pre-selecting applicants for projects financed from the ESF. On top, the contradiction between voluntary participation in the IAP on the one hand, and the threat of sanctions in the case of non-compliance with the IAP on the other hand, is seen by the employment offices’ staff as a complication in gaining the unemployed people over for co-operation on the IAP (they share a strong opinion that this threat discourages the unemployed from participation in IAPs). One of the employment offices where we studied the progress of IAPs therefore adopted the practice of noninforming the unemployed about possible sanctions. The employment offices responded to these conditions by rationing resources and by reformulating the objective of IAPs. They further narrowed down the objective and target group: they targeted IAPs at those unemployed ‘‘who are willing and who desire a job as quickly as possible, but are at a loss, disorientated or have poor selfconfidence; some are happy to let others decide for them’’. At the same time, they stopped urging that IAPs should be signed (‘‘in the past, we would sign the IAP with almost everyone who did not say no’’) and only do so where ‘‘it makes sense’’. The gap is thus widening between the IAP’s goal – ‘‘to motivate and activate’’ (which would imply selecting the less motivated and less active unemployed), and the actual targeting at a rather narrow group of relatively sufficiently motivated (although not well orientated) unemployed people, providing them just with orientation in the labour market and supporting their self-confidence. Most valued about the IAP is the fact that it increases the client’s self-awareness – it makes the client ‘‘give some thought to his/ her situation’’ (in the initial phase). Secondly, the contract implies a certain formal pressure to take the initiative, and, finally, it creates a ‘‘placebo effect’’ (‘‘he/she feels that something is happening’’, ‘‘that someone is taking care of him/her’’). According to our findings, the number of concluded (signed) IAPs has decreased after the enactment of the new Employment Act: nearly by half on average in 2005 (the routine phase) compared with the pilot phase in 2003. Under the given circumstances, the IAP is perceived as one of the forms of individual work, but not the dominant one, and with only a modest degree of intensity of individual work with the client: a meeting with the client is scheduled to be held once/twice a months in average (depending on caseload) and lasts about 15 min. The counselling process during IAPs’ implementation has further simplified and been made more effective in terms of workload: the IAP offer is passed together with other information at meetings that mediators-counsellors hold for groups of the unemployed. Putting the IAP together (with those who express interest in it) is then relatively simple: the unemployed persons are given the IAP form – usually to take home with themselves – and asked to present their ideas about their further career at the next appointment. These are then discussed with the mediators-counsellor and the IAP is concluded. The fulfilment of the IAP is monitored at follow-up appointments at the employment office. The evaluation of the IAP after the set period of time is at most employment offices essentially formal; the link to active employment policy measures is explicitly formulated neither during the IAP, nor after its completion, because emphasis is on intensifying the job search. In fact, it is a step back to standard mediation by means of a formalised contract. The mediators-counsellors would only find the model of IAPs effective if there was enough time for individual clients and a
sufficient stock of vacancies and programmes (‘‘with the current capacity limitations, the IAP is nonsense’’). In fact, rather than advancement of the individual approach we witness a stagnation at the level of the administrative-bureaucratic approach, with a tendency towards a more formal conception of the IAP and a reduction in its overall importance. The shift in the programme’s goals and design takes place at the level of local, street-level bureaucracy, and follows from the relatively vague definition of the programme goals set in the top-down process, but mainly from the acknowledgement of the insufficient personnel conditions (number of staff and their competencies for individual counselling) and – finally – inadequate legislative embedding of the programme. Finding new ways for activation at the local level: the ESF’s projects Beginning in 2004, the possibility to carry out the ESF’s projects, opened new opportunities for activation at the local level. First of all, it broadened the offer of programmes suitable for activating unemployed people with accumulated handicaps. Secondly, it prepared the ground for a greater degree of individualisation of interventions in favour of the unemployed: in enhancing the human and social capital of the unemployed. Thirdly, policy communities emerged, involving local actors concerned with either the functioning of the projects or their outcomes. Private agencies came into play, usually in the role of project organisers or suppliers of services for employment offices or for organisers of other projects – they either provide or purchase individual diagnostics, motivation, and requalification programmes and practical training, or bring together employers, non-governmental organisations, and municipalities. The Local Employment Offices co-operate particularly in the field of creating suitable conditions and assigning the projects. In addition, employment offices mediators-counsellors are charged with the pre-selection of unemployed persons for the projects, and they also facilitate the involvement and co-operation of municipalities (local authorities) on the preparation and support of suitable activities. In this line of the bottom-up policy formation, the strategy of activation has things to offer. It provides the unemployed with a new choice, encouraging their chances in the labour market. The Public Employment Service in the location with below-average unemployment, where the administrative approach to the IAP (type D) is being applied, has been turning its attention and capacity for individual work towards such projects, including the performance of individual diagnostics: as many as 20 projects involving 800 participants were carried out during 2004-2005. This number comes to about a quarter of the unemployment stock, which is an extraordinary proportion, given that in another region it was about a tenth of the unemployment stock. The Employment Office approaches activation with a stronger emphasis on the needs of the unemployed, but rather by creating necessary space and rendering this activity to other agents, than by actually carrying out the work (owing to insufficient capacities). At the Employment Office where unemployment was somewhat higher than average and application of the IAP somewhat more professionalised (type C), convergence towards a simplified administrative model (type D) was also apparent in the routine phase, among other things in connection with the manager of the department of counselling for mediation having left the office[3].
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Conclusion: changing the model of activation from the bottom-up? A new strategy of activation has been gradually forming at the local level. A high degree of discretion (and increasing decentralisation) given to the local employment offices in implementing IAPs enabled them to cope with inadequate implementation conditions. Discrepancy between top-down policy of activation and bottom-up policy increased. Activation is influenced (but less and less so) by the strategy adopted in 2002 in connection with piloting the IAPs. We referred to this strategy as an inconsistent or weak version of the strategy of enforced activation. This top-down line of policy-making is based on negative and (just to a small degree) positive job-search incentives and makes only a limited use of the individual approach. Application of such a version of the individual approach that would involve a broader support of the unemployed is hindered particularly by personnel and financial resources: the number and professional qualities of staff. These limited capacities imply an inconsistent implementation of this approach in several respects, and its redefinition at the local level. For example, depending on the local conditions, the extent of IAPs is often significantly and selectively curtailed and its content in terms of individual work is substantially reduced and formalised. This does not, however, mean that the strategy of activation as such, or the individual approach to activation, are dying out too. The strategy of activation is ever more powerfully shaped by the second line of policy-making – bottom-up – which emerges through involvement of a coalition of local actors. This line is to a greater extent influenced by the principles of inclusive participation, owing to finances provided under set conditions directly to the local partners from the European funds. In this way, resources are important as they (de)mobilise actors. On the other hand, the learning process is important as well. It must also be noted that the pilot phase of IAPs’ application played a positive preparatory role. Employment offices learned what it takes to carry out individualised work with the client and went through the process of institutional learning. The process of institutional learning is still underway and is gaining in intensity, both because more actors are involved in it, and because these actors can now access real resources and accomplish their plans – which is one of the implementation conditions that, in the case of IAPs, was not met. It is interesting that local actors unwittingly refrain from the strategy of enforced activation without reformulating transparently their goals and priorities. Nevertheless, they spontaneously identify those unemployed persons whose handicaps deserve other, more profound, forms of intervention than a mere ‘‘signed contract’’, and strive to channel and suit such interventions to the needs of these unemployed. It seems that the shift towards the strategy of inclusive participation was facilitated, firstly, by the learning process and, secondly, by the modified implementation conditions, when available resources helped local actors initiate the bottom-up process. Besides, such actors have got involved who have an insight into clients’ individual needs. The policy-making process has not taken the path of achieving clearly defined and legitimised goals, but rather the path of trial and error. It pursues multiple goals at once. Besides, these goals are not fully transparent, as they are formulated in a rather abstract or vague, and sometimes even conflicting, way (Meyers et al., 2001). Operative goals – which are closely related to the existing implementation conditions (the number and competence of staff and financial resources available for active measures) and possibilities for action, and which pull in coalitions of actors at the local level – are gaining in importance. These operative goals represent the means of accomplishing the
official vague goals, thus themselves becoming the ‘‘outcomes’’ as a result (Hall, 1999). Because of the vagueness of the official goals and the instability of implementation conditions it is not a systematically organised process but rather experimentation by the actors involved. Notes 1. Van Berkel and Hornemann Møller (2002, p. 45) define them as economic globalisation, demographic changes, labour market changes, processes of differentiation and individualisation, and reduced government spending, and interpret them as a shift towards the risk society. 2. For example, at the employment office located in an above-average unemployment region, it was only about 6 per cent in the category of persons under 25 years of age and 1-2 per cent in the category over 25 years of age, while at the employment offices in a location with below-average unemployment, it was almost 30 per cent. 3. It is symptomatic that she quit the employment office for work in a private agency that implements European projects. References Bonvin, J.-M. and Farvaque, N. (2007), ‘‘A capability approach to individualised and tailor-made activation’’, in Van Berkel, R. and Valkenburg, B. (Eds), Making it Personal. Individualising Activation Services in the EU, The Policy Press, Bristol. Burns, T. and Stalker, G.M. (1961), The Management of Innovation, Tavistock, London. European Commission (2000), ‘‘The service model of Public Employment Services to support the fight against long-term unemployment’’, working paper of the commission services, Brussels. Ferge, Z. (1997), ‘‘The changed welfare paradigm: the individualization of the social’’, Social Policy and Administration, Vol. 31 No. 1, pp. 20-44. Giddens, A. (1998), The Third Way: The Renewal of Social Democracy, Polity Press, Cambridge. Hall, R.H. (1999), Organisations, Structures, Processes and Outcomes, Prentice Hall, New Jersey, NJ. Harris, J. (1998), ‘‘Scientific management, bureau-professionalism, new managerialism: the labour process of state social work’’, British Journal of Social Work, Vol. 28, pp. 839-862. Hill, M. and Hupe, P. (2002), Implementing Public Policy. Governance in Theory and in Practise, Sage, London. Lane, J.-E. (1987), ‘‘Implementation, accountability and trust’’, European Journal of Political Research, Vol. 15 No. 5, pp. 527-46. Lester, J.P. and Goggin, M.L. (1998), ‘‘Back to the future: the rediscovery of implementation studies’’, Policy Currents, Vol. 8 No. 3, pp. 1-9. Lipsky, M. (1980), Street Level Bureaucracy. Dilemmas of the Individual in Public Services, Russell Sage Foundation, New York, NY. Lipsky, M. (1991), ‘‘The paradox of managing discretionary workers in social welfare policy’’, in Adler, M., Colin, B., Clasen, J. and Sinfield, A. (Eds), The Sociology of Social Security, Edinburgh University Press, Edinburgh, pp. 212-28. Majone, G. and Wildavsky, A. (1979), ‘‘Implementation as evolution’’, in Pressmann, J. and Wildavsky, A. (Eds), Implementation, University of California Press, Berkeley, CA, pp. 163-80. Matland, R.E. (1995), ‘‘Synthetising the implementation literature. The ambiguity-conflict model of policy implementation’’, Journal of Public Administration Research and Theory, Vol. 5 No. 2, pp. 145-74.
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Meyers, M.K., Glaser, B., Dillon, N. and MacDonald, M. (1996), ‘‘Instutitional paradoxes: why welfare workers can’t reform welfare’’, UC DATA Working Paper No 7, University of California, Berkeley, CA. Meyers, M.K., Riccucci, N.M. and Lurie, I. (2001), ‘‘Achieving goal congruence in complex environments: the case of welfare reform’’, Journal of Public Administration Research and Theory, Vol. 11 No. 2, pp. 165-201. MLSA (MPSV) – Ministry of Labour and Social Affairs Czech Republic (2004), Na´rodnı´ akcˇnı´ plan zameˇstnanosti 2004-2006 (National Action Employment Plan 2004-2006), MPSV, Prague. Mosley, H. and Sol, E. (2001), ‘‘Process evaluation of active labour market policies and trends in implementation regimes’’, in De Koning, J. and Mosley, H. (Eds), Labour Market Policy and Unemployment, Edward Edgar, Cheltenham. pp. 163-77. OECD (2004), Benefits and Wages, OECD Indicators, OECD, Paris. OECD (2005), Employment Outlook, OECD, Paris. Offe, C. (1996), Modernity and the State: East, West, Polity Press, Cambridge. Palumbo, D.J. and Calista, D.J. (Eds) (1990), Implementation and the Policy Process: Opening up the Black Box, Greenwood Press, New York, NY. Riccucci, N.M. (2005), How Management Matters. Street-level Bureaucrats and Welfare Reform, Georgetown University Press, Washington, DC. Sabatier, P.A. (1986), ‘‘Top-down and bottom-up approaches to implementation research: a critical analysis and suggested synthesis’’, Journal of Public Policy, Vol. 6 No. 1, pp. 21-48. Scott, W.R. (1969), ‘‘Professional employees in bureaucratic structure: social work,’’ in Etzioni, A. (Ed.), The Semi-professions and their Organization: Teachers, Nurses, Social Workers, Free Press, New York, NY, pp. 82-140. Serrano Pascual, A. (Ed.) (2004), Are Activation Policies Converging in Europe? The European Employment Strategy for Young People, ETUI, Brussels. Sirova´tka, T. et al. (2003), ‘‘Proble´my trhu pra´ce a politiky zameˇstnanosti’’ (‘‘The problems of labour market and employment policy, Czech Republic’’), Vy´zkumna´ zpra´va (research report), Masarykova univerzita, Brno. Van Berkel, R. and Hornemann Møller, I.H. (2002), ‘‘The concept of activation’’, in Van Berkel, R. and Hornemann Møller, I.H. (Eds), Active Social Policies in the EU. Inclusion through Participation?, The Policy Press, Bristol, pp. 15-44. Van Berkel, R. and Valkenburg, B. (Eds) (2007), Making it Personal. Individualising Activation Services in the EU, The Policy Press, Bristol. Van Meter, D. and van Horn, C.E. (1975), ‘‘The policy implementation process: a conceptual framework’’, Administration and Society, Vol. 6 No. 4, pp. 445-88. Vinzant, J. and Crothers, L. (1998), Street-Level Leadership: Discretion and Legitimacy in Frontline Public Service, Georgetown University Press, Washington, DC. Za´kon cˇ. 435/2004 o zameˇstnanosti (Employment Act No. 435/2004). Further reading McGregor, E.B. Jr (1993), ‘‘Toward a theory of public management successes’’, in Bozeman, B. (Ed.), Public Management: The State of Art, Jossey-Bass, San Francisco, CA, pp. 173-85. MLSA (MPSV) – Ministry of Labour and Social Affairs Czech Republic (2006), Analy´za vy´voje zameˇstnanosti a nezameˇstnanosti v roce 2005 (Analysis of Employment and Unemployment Dynamics in 2005), MPSV, Prague. Pressmann, J.L. and Wildavsky, A. (1984), Implementation, University of California Press, Berkeley, CA.
Winter, S. (1990), ‘‘Integrating implementation research’’, in Palumbo, D.J. and Calista, D.J. (Eds), Implementation and the Policy Process: Opening up the Black Box, Greenwood Press, New York, NY, pp. 19-38. About the authors Toma´sˇ Sirova´tka is professor of social policy and social work at the Faculty of Social Studies, Masaryk University in Brno, and head of the Research Centre Brno of the Research Institute of Labour and Social Affairs. Toma´sˇ Sirova´tka is the corresponding author and can be contacted at:
[email protected] Pavel Hora´k is PhD student of social policy and social work and lecturer in the field of sociology and organisational culture at the Faculty of Social Studies, Masaryk University in Brno, and researcher at the Institute for Research on Social Reproduction and Integration. Marke´ta Hora´kova´ is PhD student of social policy and social work and external lecturer in the field of social policy and labour market policy. She is also researcher at the Institute for Research on Social Reproduction and Integration and at the Research Institute of Labour and Social Affairs.
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Changing modes of governance in activation policies in France and The Netherlands: common path or countermodel? Nicolette van Gestel Institutional Dynamics and Employment Relations, Nijmegen School of Management, Radboud University Nijmegen, Nijmegen, The Netherlands, and
Jean-Michel Herbillon Consultant, Groupe de Sociologie Politique Europe´enne, Institut d’Etudes politiques, Strasbourg, France Abstract Purpose – To explore and explain differences in reform of activation policies, comparing the shifts in governance in France and The Netherlands from the 1990s onwards. Design/methodology/approach – The paper is based on in-depth case studies of the reform process in activation policies, using documentary sources and interviews with several stake-holders. The theoretical scope is the debate on institutional change, path-dependency and convergence. Findings – Although both countries demonstrate converging tendencies in the transformation of their activation policies, there are remarkable differences in the new modes of governance. Moving away from a traditionally hierarchical organisation, France is gradually developing a network model with more emphasis on decentralisation. Alternatively, The Netherlands privatised their public employment services and explore principal – agent realtions in activation. The institutional context of both nation, in particular the concept of path-dependency, seems crucial in the explanation of these differences. However, some new elements are path-breaking in a national context but do not illustrate converging trends. Research limitations/implications – This comparative study is aimed at the fields of employment services, social benefits and social assistance in two countries. For a more complete approach of the changes is activation policies, further research is needed to include other fields of social policy and other nations whithin Europe. Originality/value – The paper develops both empirical and theoretical conclusions on the path-dependent and convergin elements in transforming labour market coordination throughout Europe. Keywords Public policy, France, The Netherlands, Employment, Social security Paper type Research paper
International Journal of Sociology and Social Policy Vol. 27 No. 7/8, 2007 pp. 324-333 # Emerald Group Publishing Limited 0144-333X DOI 10.1108/01443330710773890
Introduction Over the past decade most European countries have experienced major changes and reforms in activation policies, both in social security and employment services. An important issue for comparative research is to determine whether these changes follow various national paths, or if some common ‘‘European’’ model is developing. The hypothesis of a common path is convincing by the stipulation of similar reform orientations in three important respects (Torfing, 2001; Jessop, 2004). First, the change from welfare to workfare, where social policy is increasingly subordinated to economic demands in order to improve labour market flexibility and lowering public social expenditure. Hence, the right to social benefits is ever more linked to an obligation to work or participate in training programmes. Second, the tendency of decentralisation, or the transition from national regulation towards multiple forms of regulation at various scales, articulated and bypassed in complex ways. Third, the move away from
hierarchical state steering towards other modes of governance, bringing actors together from state, private business and civil society, mutually interdependent but operationally autonomous. However, despite these common reform trends, certain national characteristics remain, and many of the distinctive features from the typical national regimes of welfare states seem to have survived (Esping-Andersen, 1996; Van Kersbergen, 2000). With reference to the opposing trends of convergence and divergence, the debate around the dynamics of governance is highly controversial. Some authors put an emphasis on path-dependency theory and claim that differences in national regimes will endure whatever the common trends in the European or international environment (Torfing, 2001; Barbier, 2001; Pierson, 2001). Others note the gradual, but growing adaptation of the liberal model of activation policies in the context of global competitive pressures (Finn, 1999; Guille´n and Palier, 2004; Jessop, 2004). This debate is crucial in the perspective of employment and social security issues in Europe, in particular with referring to the problems of unemployment and social exclusion. Comparison between the French and the Dutch models will provide interesting findings, as both countries are usually classified as ‘‘continental’’ welfare regimes but differ significantly in their initial principles of the governance of ‘‘activation’’. Moreover, during the last decade, they experienced major changes in activation policies. By the end of the 1990s and the beginning of the 2000s they showed various reforms, such as the decentralisation in France or the privatisation of employment services in The Netherlands. On the basis of these recent changes, the question is raised if the emerging new modes of governance represent a path-dependent development ‘‘according to which, in a given institutional system, preceding steps in a particular direction induce further movement in the same direction’’ (Erhel and Zajdela, 2004, p. 128), strengthening initial national differences, or that a common path is being developed towards a ‘‘European’’ strategy in activation policies. The aim of this article is to answer this question by looking at the changes and reforms in the respective countries from the 1990s onwards. From a methodological and theoretical point of view, we will emphasise two points. First, that it is necessary to conduct a process analysis of activation policies within an institutionalist framework. The context and process of reforms are crucial in receiving an enhanced view of their authenticity and meaning. For that reason, the paper is not only based on secondary literature but on in-depth case studies of the reform process, using documentary sources and interviews with many stakeholders. Second, both path-dependency and convergence appear to be significant in understanding the dynamics in governance, but in different ways. Convergence seems to be explanatory for the overall tendency, according to which welfare states are being transformed towards ‘‘activation states’’. Path-dependency, however, explains the pace and variance in reform, following counter models of activation strategies. In the next section, we present the characteristics of the governance regimes in activation services in France and The Netherlands at the beginning of the 1990s. Then we examine the dynamics of governance and activation policies in both countries during the 1990s and beginning of the 2000s, emphasising first the converging trends, and then the path-dependent components of these changes. Finally, we draw some empirical and theoretical conclusions on new modes of governance in activation policies.
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Two national regimes of activation policies Although France and The Netherlands are generally classified as ‘‘continental’’ welfare states, in many respects they are very different countries. The power of the central state, the role of civil society and their regular patterns of policy-making vary significantly. With regard to the relationship between state and civil society structures, France is almost the inverse of The Netherlands. France is characterised by a strong state and a weak, but protest-oriented, civil society (Merrien and Bonoli, 2000). The Dutch political system is usually qualified as a typical case of consensus democracy, even if it is less true today. According to Esping-Andersen’s (1996) typology, France is considered as a conservative-corporatist welfare state. Insurance is conditional on work and the payment of social contributions (Bismarckian model) (Erhel and Zajdela, 2004, p. 127). The organisation of unemployment benefits (UNEDIC) is governed by a bi-partite board of employers’ associations and trade unions. When unemployment figures rose dramatically in the 1980s and 1990s, the French state felt obliged to introduce a minimum income: Revenu Minimum d’Insertion (RMI) on a non-contributory basis, state-financed and (theoretically) conditional on the signature of a re-employment contract (Erhel and Zajedela, 2004). The Dutch welfare state is a notably different variant of the continental model, with a mix of the social–democratic (Scandinavian) and corporatist model (Van Berkel and van der Aa, 2005). Although social benefits have always been related to jobs and the payment of social contributions, social assistance was already grounded in the 1960s and paid by general taxes. In the governance of activation services, both countries have a tradition of hierarchy. In France, two public organisations were set up in the late 1960s, the national employment agency (Agence Nationale Pour l’Emploi, ANPE) and the association for adult vocational training (Association pour la Formation Professionnelle des Adultes, AFPA), both under strictly supervision of the ministry of employment and labour. The Dutch public employment service (PES) originally started as an initiative of trade unions and local government, but was incorporated in the central state from the 1930s on. During its long history, the German occupation during World War II strengthened the hierarchical organisation of the Dutch PESs. Although France and The Netherlands have similarities in the hierarchical mode of governance, a more thorough investigation shows up many differences. Employment policies in France were not like most European countries dominated by the national agency for employment service (ANPE) but traditionally coordinated by the national government. Successive governments secured their quite firm control of the highly politicised area of unemployment policies. Hence, ANPE has always been considered ‘‘as a crucial administrative instrument in the hands of central government’’ (Barbier, 2005, p. 256). Unlike most other European countries including The Netherlands, the French PES does not represent a single organisation dealing with activation policies, but ‘‘originally represented a consortium of public organisations coordinating their respective policies on the level of central government.’’ (Gramain et al., 2006, p. 53). Hence, the PES is not a separate agency, but an arena of cooperation between the three main organisations in employment policies: the Ministry of Employment, the ANPE and the AFPA. Initially, the UNEDIC (national organisation for unemployment benefits, governed by the social partners) participates at the national level. In the Dutch system, the agency for PESs (Arbvo) was the core organisation for employment policy, having a monopoly status till 1991. Opposed to the French history, and until the 1990s, fixed lines were drawn between the policy areas of employment services, vocational training (except the allied Centres for Vocational Training of the PES), social benefits (organised by semi-public
associations under supervision of the social partners) and social assistance (organised by the local municipalities). In The Netherlands, the political debate has been mainly focused on the organisation of social security, with the PES agency remaining less politicised. Thus, although France and The Netherlands indeed belong to the broad category of continental welfare regimes and both countries have a similar tradition of hierarchy in the governance of employment services, they differ significantly in many important respects. These differences can be related to the various national institutional contexts. The role of the central state (far more developed in France), the position of civil society (much stronger in The Netherlands) and the standard patterns of policy-making (top–down vs consensus-seeking) vary considerably. With regard to the hypothesis of path-dependency, the differences in institutional legacy will have conditioning effects upon strategic attempts to bring about change. Following the hypothesis of convergence, however, identical problems that came across the two national systems, such as global economic demands, public expenditure deficits and the growing ineffectiveness of central programmes, may enforce them to agree on a common strategy in activation policies. A common path in activation policies: the hypothesis of convergence The hypothesis of convergence relates to an analysis of the very recent changes in both countries with respect to the organising of return-to-work activities. The first important element of change is the introduction of the notion of ‘‘activation’’ itself. Since the early 1990s, the social security system and employment services in both countries received severe criticism. High rates of (long-term) unemployment have been considered as strongly connected to the problems of organising and implementing welfare state services and this perception was the key factor behind institutional change. In contrast to the traditions of hierarchy in the governance of activation policies, both France and The Netherlands seek their way out of the labour market problems by changing their mode of governance. These changes were legitimised by an ideological turn in the perception of the role of individuals, companies and the role of the state. In both countries, the proposed aim of a wide variety of reforms in welfare systems is to ensure that jobless people who are able to work receive a proper assistance in entering the labour market. The strong emphasis on income assistance in traditional welfare arrangements has been gradually replaced by an active and accurate support for work. At the ideological level, the ‘‘activation paradigm’’ can be understood as a set of representations and justifications which underpin a way of conceiving social change (Serrano, 2002). Decentralisation appears to be the second most important modification for 20 years in the fields of employment policy and social security (Bekke and van Gestel, 2004; Gramain et al., 2006). In France as well as in The Netherlands, this development is most strongly recognised in the areas of social assistance and employment services. First, the management of allowances as well as the accompanied activation services have been set at a local level in order to make services better adapted to clients’ needs. Second, the financial responsibility has been decentralised to the De´partements in France and the local municipalities in The Netherlands, to allow a closer and hence better supervision of the way public funds are used (Gramain et al., 2006, p. 12). These reforms have a rather recent character: in France the complete decentralisation of the RMI was realised after the severe criticism that the number of beneficiaries decreased only very slightly and 70 per cent still received a benefit two years later despite better
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economic circumstances in 2000-2001. The Dutch system of social assistance has been radically changed in 2004 with the decentralisation of the financial responsibilities for social assistance and return-to-work activities to the local government (Work and Assistance Act, 2004). Furthermore, the PESs were privatised and local governments were obliged to assist beneficiaries in returning to a job by contracting private employment service agencies (Van Berkel and van der Aa, 2005). A third issue of convergent change in activation policies are the many initiatives to create an effective cooperation between the state and non-state actors, such as private business and social partners. A turning point for both France and The Netherlands was at the start of a new century. The Dutch structure for social benefits and employment services has been radically altered by the SUWI Act 2002 (Work and Income Implementation Structure Act). This reform implied the merger of six organisations for social benefits in one public agency (UWV). This public agency became the main principal of many private agencies for employment services, competing for contracts to assist the unemployed and partly disabled people. The 600 private reintegration companies in the newly created market of employment services have to cooperate with the central and local state, the employers and (potential) workers and their associations. In France, since the 2001 unemployment compensation reform and the foundation of PARE (the Back-to-Work Assistance Plan), the social partners fulfil a far greater role than before in activation programmes. From 2001 onwards, UNEDIC, the national organisation for the unemployment insurance system and governed by the social partners, has become a major player in the organisation as well as in the funding and to some extent the active labour market policies in a more close cooperation with the central state (Gramain et al., 2006, p. 52). In sum, our study highlights several important convergent trends in the new modes of governance of activation in France and The Netherlands. Three tendencies seem to be most characteristic for the change process in both countries. First, the ideological turn towards ‘‘activation’’ as a goal (the mobilisation of unemployed persons to facilitate their incorporation into the labour market) and a method (a revision of rules governing incentives to work accompanied by a limitation of – access to – employment benefits) (Serrano, 2002). Second, the changing relations between national and local authorities and the decentralisation of policy-making processes which suggest a major decline of central state hegemony and the inducement of a polycentric dynamic in governance (Thoenig, 2005). Finally, the involvement of non-state actors in activation policies, in which private business (The Netherlands) or the social partners and the not for profit agencies in return-to-work activities (France) have received a much stronger role since the beginning of the new century. All in all, the converging new modes of governance imply an increasing flexibility of the national welfare states by delegating social problems, policy-making and funding towards lower territorial scales and by engaging non-state actors in the enduring combat against labour market problems. New modes of governance in activation: identifying various national strategies In contrast with the convergence in the national processes of activation policies, some authors tend to emphasise the differences in the ways the activation paradigm is implemented in various national models and political traditions (Barbier, 2001; EspingAndersen 1996; Pierson, 2001). The hypothesis of path-dependency has been encouraging for the theoretical development of counter models in activation policies.
Serrano (2002, p. 18) distinguishes between two polar positions in Europe with respect to the national strategies to regulate the behaviour of job seekers and the way state and non-state actors are facilitating them: those more focused on incentives (‘‘carrots’’) and those that resort to penalties (‘‘sticks’’). The ‘‘carrots’’ strategy is supposed to be corresponding with the continental or universal type of social welfare system, where fewer obligations have been laid down. The ‘‘sticks’’ approach should be closer to the American or liberal model, with ‘‘a greater emphasis on negative sanctions and a much more repressive disciplinary approach’’ (Serrano, 2002, p. 18; see also Barbier, 2001). These different strategies do not only guide government’s regulation of job seekers, but also its regulation of the agencies involved in delivering services. In this section, we will analyse these various strategies in relation to the differences in governing activation policies in France and The Netherlands. In spite of the broad consensus regarding the need to implement the principle of activation, the various interpretations of this concept gave rise to divergence in terms of intervention models (path-dependency). The ideological turn to an ‘‘activation paradigm’’, i.e. the mobilisation of the unemployed to facilitate their incorporation into the labour market, has a different meaning in France and The Netherlands. While France put the emphasis on the fight against social exclusion which has been related to the problems of long-term unemployment, The Netherlands stressed the economic necessity of a growing activity rate to raise a substantial reservoir of labour. According to Barbier (2001), the main French social question was not one of transferring people from welfare to work during the 1990s, but providing welfare for people who did not get a chance for a job, i.e. the young, long-term unemployed or low-qualified workers. In The Netherlands, however, participation in employment is considered as the core instrument in realising individual independence and social integration (Van Berkel and van der Aa, 2005). In international comparisons, the activity rates were traditionally low in The Netherlands. The differences in the final goal of activation in both countries (social inclusion versus raising the activity rate) have far-reaching consequences for the structure and content of activation policies. The emphasis on social inclusion in the French system implies that there is much more attention for employability policies and training, while activation policies in The Netherlands are almost exclusively attentive for short-term employment results. Decentralisation is a second main characteristic of the reform strategy in activation in both countries, but in an entirely different way. In France, the role of national government in employment policy is still very important. However, it aims to facilitate local and regional authorities to enlarge their share in employment policies. Despite the tradition of hierarchy and strong state power, recent reform in the French employment politics apparently demonstrate that ‘‘carrots’’ are more often used than ‘‘sticks’’, e.g. the ‘‘Envelope’’ policy (amount of money) where actors at lower territorial levels are invited to cooperate in making plans to fight labour market problems. This policy is known as ‘‘territorialisation’’. In The Netherlands, however, the management of activation policies is characterised by an increasing amount of ‘‘sticks’’ by using financial criteria and sanctions. This can be particularly mentioned in the regulation of the local Funds for Work and Income, where municipalities receive attractive profits if they are successful in diminishing the amount of beneficiaries. Despite the similar tendency in France and The Netherlands towards an increasing cooperation between state and non-state actors, both countries vary fundamentally in the type of cooperation and the corresponding division of power. In the complex French system, the overwhelming majority of activation services is still public and in hands of
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organisations as ANPE, local authorities and not-for-profit organisations such as UNEDIC, the unemployment insurance system (Barbier, 2005). Although an important and increasing part of services has been contracted out by ANPE, as local and regional government bodies did, this process undoubtedly is not to be considered as privatisation or as building a proper (quasi-) market (Barbier, 2005, p. 258). Instead, there is a growing amount of negotiation at various levels of decision-making: national (Service public de l’Emploi, ’SPEN), regional (SPER), departmental (SPED) and local (SPEL). When the decentralisation process set off in France in the 1990s, at the local level the doors have been opened for a broad range of local institutional or semi-public actors (Gramain et al., 2006, p. 54). The Netherlands have introduced a completely different way of involving non-state actors in the governance of activation. With the SUWI Act 2002, a principal-agent system has been set up with government agencies and employers in the role of principals and private reintegration companies as their agents. Unlike France, where the social partners established a growing influence on activation programmes both in policy-making and funding, The Netherlands imposed on the social partners to withdraw from the governance of the social security system. The traditional neo-corporatist organisation of social benefits in The Netherlands was completely altered in the 1990s after the political blaming of social partners for the high rates of inactivity (in particular of disabled workers). Thus, our research of the changing modes of governance in activation shows that despite several convergent trends there are significant differences in the national strategies of France and The Netherlands. Two polar strategies, the liberal ‘‘stick’’ model and the continental ‘‘carrot’’ one can be partly recognised in the characteristics of the new modes of governance in both countries. First, the ideological switch towards ‘‘activation’’ turned out to have a different meaning in both countries. France laid most emphasis on the combat of long-term unemployment and social exclusion and The Netherlands were mainly focused at decreasing their inactivity rate. These differences can be understood by the variations in the institutional context of both countries, where social assistance originally was not well developed in France and The Netherlands traditionally had a low level of labour market participation. This pathdependency has far-reaching implications for the importance of employability and training in the activation services (strong in France, weak in the Dutch system). Second, the decentralisation in both countries resulted in different governance systems. In France, the continental ‘‘carrot’’ model seems dominant with an accent on policy networks with many stakeholders at various levels of negotiation. In The Netherlands, the policy network model was preferred in the 1990s. However, the Dutch system switched later to a managerial hierarchy, with decentralisation of funding and responsibilities parallel with strict central rules. Third, in both countries non-state actors have become much more heavily involved in activation policies in the last decade. In The Netherlands, a principal-agent system became dominant in which private businesses play the chief role. In France, however, the ‘‘market’’ does not play a strong role in activation policies yet but a growing area for experimental, pragmatic projects is developing. Considering the new principles of competition and the ‘‘no cure, no (or less) pay’’ contracts, the liberal ‘‘stick’’ model can be most strongly recognised in the Dutch system. In contrast to The Netherlands, the social partners in France have a considerably greater role in activation since 2001. Altogether, the path-dependent elements in the new modes of governance are far more than simple variations on
convergence, and can be strongly recognised in various national strategies of activation. Conclusion In most European countries, the modes of governance in activation services are moving away from the traditionally hierarchical model and the status of public monopoly. However, there are many differences between nations in alternative ways of coordinating labour market problems. This article aimed to explore and explain the similarities and differences, comparing the shifts in governance of activation policies in France and The Netherlands from the 1990s onwards. From our study, two interrelated conclusions can be drawn. On the one hand, there is convergence in the overall trend towards activation. An ideological turn has been made towards the mobilisation of unemployed persons to facilitate their incorporation into the labour market with incentives to work accompanied by a limitation of – access to – employment benefits. Decentralisation of policy-making and funding to local and regional authorities is an important characteristic of the convergence in the new modes of governance in order to make services better adapted to clients’ needs and to allow a closer and hence better supervision of the way public funds are used. Furthermore, state and non-state actors are involved in a much closer cooperation in fighting unemployment problems. On the other hand, there are remarkable differences in the new modes of governance in both countries. While France gradually develops towards a network model with an emphasis on decentralisation, The Netherlands went through a more turbulent and radical change process in which competition and the creation of principal-agent relationships became rather dominant. Together, path-dependency and convergence appear to be significant in understanding the dynamics in governance, but in a rather different way. Convergence seems to be relevant for the overall tendencies, according to which welfare states are being transformed towards ‘‘activation states’’: the mobilisation of the work force, the decentralisation to local and regional authorities and the involvement of various non-state actors in policy-making. The hypothesis of path-dependency gives room to national characteristics in explaining the changes in activation policies. Actual changes take different forms in which scope and depth differ from country to country. The embeddedness of activation policies in various institutional contexts seems crucial in our understanding of these differences. Path-dependency, then, explains the pace and variance in reform, following counter models of activation strategies. However, while most findings of this study met the hypothesis of convergence or path-dependency, main features of the new modes of governances do not correspond with either one of these opposing positions in the current debate on European activation policies. For example, the Dutch reform of the neo-corporatist organisation for social benefits was not at all path-dependent but ‘‘path-breaking’’. However, the new mode of governance with a central state agency and privatised employment services is far from convergent with the French system. The decentralisation in France with the development of local and regional policy networks is a radical change in the traditional French governance system, which cannot be explained by path-dependency. However, the decentralisation in France is not convergent with the Dutch reforms towards competition and market-like practices. These elements of new modes of governance that are neither path-dependent nor convergent seem to be a most interesting topic for future research in the area of activation policies.
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References Barbier, J.-C. (2001), ‘‘Welfare to work policies in Europe: the current challenges of activation policies’’, Document de travail, no. 11, Centre d’e´tudes de l’emploi, Noisy-Le-Grand, available at: www.cee-recherche.fr Barbier, J.-C. (2005), ‘‘Embedding contractualism in national institutions: performance contracts in the French Public Employment Service’’, in Sol, E. and Westerveld, M. (Eds), Contractualism in Employment Services, Kluwer Law International, The Hague, pp. 255-80. Bekke, H. and van Gestel, N. (2004), Publiek verzekerd. Voorgeschiedenis en start van het Uitvoeringsinstituut Werknemersverzekeringen (UWV), 1993-2003, Garant, AntwerpenApeldoorn. Erhel, C. and Zajdela, H. (2004), ‘‘The dynamics of social and labour market policies in France and the United Kingdom: between path dependence and convergence’’, Journal of European Social Policy, Vol. 14 No. 2, pp. 125-42. Esping-Andersen, G. (Ed.) (1996), Welfare States in Transition: National Adaptations in Global Economies, Sage, London, Thousand Oaks, CA, and New Delhi. Finn, D. (1999), ‘‘Welfare to work: the local dimension’’, Journal of European Social Policy, Vol. 10 No. 1, pp. 43-57. Gramain, A., Exertier, A. and Herbillon, J.-M. (2006), ‘‘Rescaling social welfare policies in France: a comparative study on the path towards multi-level governance in Europe’’, European Centre for Social Welfare Policy and Research, Noisy-Le-Grand-Strasbourg. Guille´n, A.M. and Palier, B. (2004), ‘‘EU enlargement, europanization and social policy’’, Journal of European Social Policy, Vol. 14 No. 3, pp. 203-11. Jessop, B. (2004), ‘‘From the welfare state to the competition state’’, in Bauer, P. and Voelzkow, H. (Eds), Die Europa¨ische Union - Marionette oder Regisseur? Springer Science & Business Media, Wiesbaden, pp. 335-59. Merrien, F.X. and Bonoli, G. (2000), ‘‘Implementing major welfare state reforms: a comparison of France and Switzerland – a new-institutionalist approach’’, in Kuhle, S. (Ed.), Survival of the European Welfare State, Routledge, London, pp. 69-87. Pierson, P. (2001), The New Politics of the Welfare State, Oxford University Press, Oxford. Serrano, A. (2002), ‘‘Are European activation policies converging?’’, paper at the IREC Conference, Aalborg. Thoenig, J.C. (2005), ‘‘Territorial administration and political control: decentralization in France’’, Public Administration, Vol. 83 No. 3, pp. 685-708. Torfing, J. (2001), ‘‘Path-dependent Danish welfare reforms: the contribution of the new institutionalisms to understanding evolutionary change’’, Scandinavian Political Studies, Vol. 24 No. 4, pp. 277-309. Van Berkel, R. and van der Aa, P. (2005), ‘‘The marketization of activation services: a modern panacea? Some lessons from the Dutch experience’’, Journal of European Social Policy, Vol. 15 No. 4, pp. 329-43. Van Kersbergen, K. (2000), ‘‘The declining resistance of welfare states to change?’’, in Kuhnle, S. (Ed.), Survival of the European Welfare State, Routledge, London, New York, NY, pp. 19-36. Further reading Bouget, D. (2003), ‘‘Convergence in the social welfare systems in Europe: from goal to reality’’, Social Policy and Administration, Vol. 37 No. 6, pp. 674-93. Clark, D. (2000), ‘‘Citizens, charters and public service reform in France and Britain’’, Government and Opposition, Vol. 35 No. 2, pp. 152-69.
Considine, M. and Lewis, J.M. (2003), ‘‘Bureaucracy, network, or enterprise? comparing models of governance in Australia, Britain, The Netherlands and New Zealand’’, Public Administration Review, Vol. 63 No. 2, pp. 131-40. Daguerre, A. and Taylor-Gooby, P. (2003), ‘‘Adaptation to labour market change in France and the UK: convergent or parallel tracks?’’, Social Policy and Administration, Vol. 37 No. 6, pp. 625-38. Elgie, R. (2003), ‘‘Governance traditions and narratives of public sector reform in contemporary France’’, Public Administration, Vol. 81 No. 1, pp. 141-62. Heichel, S., Pape, J. and Sommerer, T. (2005), ‘‘Is there convergence in convergence research? An overview of empirical studies on policy convergence’’, Journal of European Public Policy, Vol. 12 No. 5, pp. 817-40. Hvinden, B. (2003), ‘‘The uncertain convergence of disability policies in Western Europe’’, Social Policy and Administration, Vol. 37 No. 6, pp. 609-24. Sol, E. and Westerveld, M. (2005), Contractualism in Employment Services: A New Form of Welfare State Governance, Kluwer Law International, The Hague. Tregaskis, O. and Brewster, C. (2006), ‘‘Converging or diverging? A comparative analysis of trends in contingent employment practice in Europe over a decade’’, Journal of International Business Studies, Vol. 37, pp. 111-26. West, K. (2005), ‘‘From bilateral to trilateral governance in local government contracting in France’’, Public Administration, Vol. 83 No. 2, pp. 473-92. Corresponding author Nicolette van Gestel can be contacted at:
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Re-activating the Nordic welfare states: do we find a distinct universalistic model? Ha˚kan Johansson
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Bjørn Hvinden Nova – Norwegian Social Research, Elisenberg, Oslo, Norwary Abstract Purpose – To clarify the core characteristics of Nordic activation policies in the context of typologies of European activation governance. Design/methodology/approach – The paper analyses activation governance in the light of the basic values and beliefs behind the formation of the Nordic social protection systems in the mid-20th century. Recent model-building efforts see the Nordic countries as being close to a ‘‘universalistic’’ and egalitarian type of activation policy that does not systematically submit citizens to work requirements. The authors ask whether this model captures the actual scope and contents of Nordic activation governance. Findings – The Nordic countries-based relatively generous income security systems on a strong work ethic and ambitions to maximise labour market participation of the working-age population. Citizens’s rights to income security were generally linked to the fulfilment of work requirements. Although this active governance of unemployed citizens eroded in the 1970s and 1980s all the Nordic countries revived it after 1990. Largely reflecting the dual structure of the income protection system, Nordic active approaches to activation are not egalitarian. Research limitations/implications – Nordic countries are currently implementing major administrative reforms in social protection, possibly creating more unified and egalitarian governance of activation. Future research needs to assess the impact of these reforms. Originality/value – The article presents an analysis of activation policies that so far has been missing from comparative research and that will be of particular value for non-Nordic readers who may have received a biased view of Nordic activation policies. Keywords Governance, Employment, Scandinavia Paper type Research paper
International Journal of Sociology and Social Policy Vol. 27 No. 7/8, 2007 pp. 334-346 # Emerald Group Publishing Limited 0144-333X DOI 10.1108/01443330710773908
Introduction The shift towards activation – the linking of income security and employment promotion – has since the early 1990s put greater emphasis on the unemployed citizens’ responsibilities and in comparative research given rise to new typologies of national policy efforts. The Nordic countries have a tradition of encompassing and redistributive income security and active labour market policies. In current debates on the governance of activation, these countries are described as cases of a universalistic model of activation, in contrast to selective models of activation. In our view, these claims are based on a simplistic understanding of the Nordic governance of activation; i.e. the constitution of social protection systems, the contents of activation policies and the social position of their target groups. In this article, we apply a wide approach to activation governance, analysing the Nordic welfare states’ general institutional architecture regarding activation. We substantiate our argument by examining recent policy efforts directed at unemployed citizens, including the citizens with the most marginal position in relation to the labour market (people claiming social assistance) and the development of a local tier of activation governance.
Contrasting European models of governing activation Linking income security and employment promotion can mean very different things. Analytically we can distinguish between capacity-building approaches and incentivestrengthening approaches, which illustrate two (ideal-typical) models of the governance of citizens out of work: Capacity-building approaches are oriented towards improving the capacity, knowledge and skills of unemployed citizens claiming cash benefits, with the purpose of increasing their prospects of finding and keeping jobs. Hence governments provide training and education for unemployed citizens. To ensure that they use these provisions, governments may make the continued granting of benefits conditional upon unemployed citizens’ participation in and completion of courses or schools. By contrast, incentive-strengthening approaches are oriented towards ‘‘making work pay’’, i.e. preventing that unemployed citizens are better off financially out of work than in work, for instance, because of the level and duration of cash benefits compared to the level and stability of wages in the relevant parts of the labour market. Incentive-strengthening approaches can be manifested in a withdrawal of public resources by lowering replacement rates (benefit levels) and/or shortening the duration of benefits. Alternatively, governments can shift the use of public resources to improve the relative rewards of being in work, through negative tax, tax credit or in-workbenefits for those taking up jobs, particularly low-pay jobs. These two ideal-typical models of activation governance are not mutually exclusive; governments combine them in various ways. Nevertheless, several scholars have suggested that it is possible to identify two distinct and alternative models of activation – labeled ‘‘universalistic’’ and ‘‘liberal’’, respectively – depending on whether governments mainly rely on capacity-building or incentive-strengthening (Barbier, 2004; Barbier and Ludwig-Mayerhofer, 2004; Esping-Andersen et al., 2002; Ferrera and Hemerijck, 2003). According to Barbier (2004), the first model is universalistic in the sense that it extends to all citizens and guarantees relatively high standards of living for all its beneficiaries. Moreover, the universalistic model does not systematically submit citizens to work requirements. Activation applies to all citizens in a relatively egalitarian manner and the individual’s and society’s demands are well-balanced. The second model is liberal in the sense that it is gives the market the dominant role as source of individual well-being and protection against risks. Moreover, this model is more strongly oriented towards maximising labour market participation, being associated with a limited public system of income security and employment promotion, strongly relying on means-testing and work-conditional benefits. Although Barbier stresses that no single country fits completely with any of these models, he states that Nordic countries are close to the universalistic model, while the UK is close to the liberal model. We have grave doubts about the fruitfulness of the typology of national approaches to activation we have summarised here. Even if its originator draws a clear distinction between models and actual national configurations of policies, the typology inevitably leaves the reader with the impression that, for instance, Nordic activation approaches – by and large – are universalistic in scope and contents and not systematically submitting citizens to work requirements. In the following analysis we will demonstrate that this image of Nordic activation policies is imprecise and misleading.
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The Nordic tradition of activation We start by clarifying the basic values and policy beliefs underlying the Nordic approaches to activation; the role of the state and the definition of unemployed citizens’ rights and obligations. A consequence of Nordic governments’ goal of promoting maximum participation in paid work (the ‘‘workline’’) has been efforts at turning all adult citizens into workers. Governments have considered high rates of employment essential for ensuring sufficient tax revenues to finance a large and expanding set of welfare provisions. Policy-makers have seen employment-promoting policies as instruments for mobilising available labour resources, improving overall labour productivity, hastening the restructuring and modernising of economic life and limiting the impact of downturns in the business cycle. In addition to such instrumentalist reasoning, a strong popular belief in the moral virtues of work has supported the workline. From the beginning of the 20th century, the Nordic labour movements gave the duty of contributing to the common good a moralistic overtone. Trade union banners encouraged members to ‘‘perform your duty, demand your rights!’’ – in that order of priority. Similar norms were later incorporated in the emerging system of public welfare provisions, e.g. in the form of the close link between previous records of employment, earnings and contributions and entitlements to social insurance benefits (e.g. unemployment insurance). With Sweden as a pioneer, Nordic governments adopted this mixed rationale when they initiated programmes of active labour market policy immediately before and after the Second World War. These programmes have included employment guidance, jobplacement services, education and training courses, medical and vocational rehabilitation and support in relocating to other parts of the country offering vacant jobs. The policy-makers claimed that these measures would serve as effective thresholds, preventing an unlimited influx of people receiving social benefits for longer periods. On the individual level, policy-makers thought offers to participate in active measures would function as ‘‘work tests’’ for unemployed people claiming social benefits: were they available for the labour market and really motivated to work? Policy-makers and professionals expressed a strong commitment to control the behaviour of unemployed citizen combined with a ‘‘therapeutic optimism’’; believing in their ability to help people at the margins of the labour market improve their capacity, job qualifications and motivation, on the basis of the apparently promising results of rehabilitation and retraining experiments. Hence, governments appealed to a norm of reciprocity between efforts and rewards in the context of active measures, for instance, through a combination of incentives (e.g. additional benefits, mobility grants) and sanctions ensuring compliance (e.g. withdrawal or reduction of benefits, forced labour market mobility). The authorities were to exhaust all possibilities for making citizens economically independent through measures like vocational rehabilitation, retraining or mobility assistance, before granting them long-term benefits. Thus active labour market policies served the dual purpose of streamlining the labour market and supporting (and controlling) the individual unemployed citizen. Sweden and Norway are most clearly falling within the policy tradition we have outlined here. From the mid-20th century and onwards these countries developed active labour market policies, directed at different segments of the population, aiming to integrate or re-integrate unemployed citizens into the labour market, often combined with – at least formally – strict forms of work enforcements within their social
protection systems. Denmark and Finland developed activation policies at a later stage and with more variable overall impact. Towards a dual system of activation governance Two main types of income security provision are ‘‘social assistance’’ and ‘‘social insurance’’. Social assistance involves a test of the person’s financial resources or ‘‘means’’. Social assistance is usually financed through general taxes. By contrast, social insurance (or ‘‘contributory benefits’’) typically involves compulsory membership for a specific population, e.g. all wage earners. Social insurance is based on the idea that contributions or premiums paid by members (and/or also by their employers) give the members clear entitlements to benefits. Social insurance is oriented towards protection against some specified ‘‘risk’’ (e.g. unemployment). The need for financial support is presumed to result from the occurrence of one of the specified risks, thereby eliminating a reason for directly testing the person’s need for financial support. In the Nordic countries, the long-term trend has been to move away from social assistance and towards social insurance (and hybrids of these two) as the main elements of income protection system. Social assistance has partly become a last-resort provision, partly a supplement for citizens with insufficient entitlements of social insurance. Yet in the early 2000s, means-tested benefits still amounted to about 5 per cent of the total social benefits expenditure, with slightly less than 5 per cent of the population over 18 receiving social assistance in the Nordic group of countries (Eurostat, 2006; NOSOSCO, 2005). This dual income security system (Marklund and Svallfors, 1987) has to a great extent been reflected in a dual system in the governance of activation in the Nordic countries. Although the state employment services have for a long time been the main provider of active measures to unemployed citizens, municipalities have recently also become providers of such measures. Partly this situation has developed because the employment services have been less successful in helping social assistance recipients in finding jobs. The staff in employment offices has argued that many unemployed citizens receiving social assistance are too distant from the labour market or that employers do not view them as attractive job candidates, even after agency efforts to assist them. Faced with an increasing number of long-term recipients of social assistance many municipalities have organised vocational guidance, placement services and activation measures targeted at these recipients. However, the most important factor behind the dual system of activation policies in the Nordic countries is the different statuses of the claimant in social insurance and in social assistance. In general, the rights to social benefits that citizens of working age enjoy are related to the duties (past or current efforts and contributions) they are expected to fulfil. Within the Nordic systems of social insurance (e.g. unemployment insurance), the right to relatively generous benefits of fairly long duration has presupposed that the individual is more than a mere member of an insurance plan, with a sufficient record of contributions. In addition, an unemployed individual must be prepared to do what he or she can to return to work as soon as possible. This duty includes registering at the employment office, actively seeking work and accepting all suitable jobs or offers for participating in labour market measures. For citizens receiving social assistance, the rationale for the activation is more complex. These citizens are almost by definition unable to fulfil the reciprocity requirements related to past efforts, performance or contributions that could give them sufficient access to social insurance benefits. In return for social assistance, their
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obligation is mainly to comply with current requirements, e.g. participating in training courses and/or actively seeking work. The combination of recipients’ weak status in the labour market and social assistance being a last resort or ‘‘safety net’’ provision means that few recipients of social assistance have alternatives to accepting these requirements.
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Variation and fluctuation within the Nordic group So far we have outlined the Nordic tradition of active governance of citizens of working age. First, we have seen that it is doubtful that social protection policies have been less oriented towards maximising labour market participation in the Nordic countries than for instance in the UK. Second, all citizens of working age claiming cash benefits have – in principle – been exposed to work requirements, justified by notions of reciprocity between rights and duties. Third, the dual structure of the income security systems – and consequently also of the systems of activation governance – makes the label ‘‘universalistic’’ inappropriate for the Nordic activation systems. We will now turn to the question of whether the Nordic systems of activation demonstrate sufficient uniformity and stability to justify seeing these systems as cases of the same ‘‘Nordic model’’ of activation. It is not difficult to point to fluctuations in the actual commitment to the workline on the part of Nordic governments. For instance, when unemployment reached persistently high levels in Denmark after the first oil crisis of 1973, unemployment benefit and social assistance became close to a de facto basic citizens’ income for a considerable group of people at the margins of the labour market (Goul Andersen and Pedersen, 2006). Denmark also tried to handle its labour market difficulties by introducing generous temporary and voluntary leave arrangements (orlovs) and a fairly accessible early retirement benefit (efterløn). When the Norwegian unemployment rate increased in the 1980s, a growing number of people were granted social assistance for prolonged periods. Many social workers resented the official activation rationale in this period; rather than pushing their claimant to go to one training course after another, they saw as their task to guide the claimant in coping with life without paid work. Social service departments were keen to provide more standardised amounts of social assistance, procedural rights, predictability and accountability for claimants, i.e. a shift towards a rights-oriented rationale rather than the instrumental means-ends rationale of activation (Hvinden, 1994). A weakening of the workline was also apparent in Sweden. In the 1980s, there was a notable movement towards a rights-to-basic-income-orientation in the local administration of the Swedish social assistance system, in terms of a shift towards rights to benefits vs activation requirements (Johansson, 2001). Such erosions are normal as all policy paradigms change over time (due to structural changes and/or anomalies within the paradigm) or are challenged by a competing policy paradigm (based on a completely different world view and policy beliefs, see Hall, 1993). Yet, it is questionable whether the workline was ever abandoned as a central policy norm in the Nordic countries. As a policy belief it has been robust throughout the later part of the 20th century and informed most national social policy reforms, possibly with the exception of Denmark.
Re-activating the ‘‘first’’ tier of activation governance The work ethic has had a revival in all Nordic countries, even if this revival has not had the same timing and practical impact. Since the late 1980s and beginning of 1990s, governments have reinvented or reinforced work requirements as a condition for social benefit entitlements. One important factor fuelling these reforms was the extra pressure on public budgets resulting from diminished tax revenues and higher government spending on social benefits during periods of high unemployment. Equally significant was the practical functioning and effectiveness of the social protection system for working-age people. Policy-makers and outside experts concluded that the agencies administering this system had become excessively oriented towards the rights of the citizens they were supposed to help, at the expense of citizens’ obligations to do their part to enter or re-enter paid work. Many policy-makers and experts argued that the policy goals and assumptions underpinning the social protection system had eroded, and that the Nordic governments needed to reinstall them as the basis for practical policy. As indicated earlier, the Nordic governments could – at least in principle – choose between two different policy options at the beginning of the process. On the one hand, they could simply make cuts in social benefit provisions: tighten the criteria for eligibility, reduce levels and shorten the duration of benefits. These cuts would potentially reduce public expenditure in the short-term and improve incentives to work. On the other hand, the governments could escalate the input of public resources for capacity-building; giving unemployed citizens the opportunity to improve their qualifications and skills. Training and education might potentially speed up the entry or return of these citizens to paid work, by widening their range of relevant jobs and increasing their attractiveness to employers. As the following discussion will demonstrate, Nordic governments followed both of these paths. Among the Nordic countries, Denmark has undergone the most explicitly ideological repositioning of the status of unemployed citizens. From the policy changes introduced in the early 1990s, the Danish government has repeatedly emphasised that unemployed persons have both a right and a duty to be activated. For instance, to increase individual incentives, the government has institutionalised this norm through changes in unemployment insurance. Principally, the Danish government has divided unemployment insurance into a passive part (years during which the unemployed could receive unemployment benefits) and an active part (years during which the unemployed had to actively participate in ‘‘activation’’ measures). Throughout the 1990s, the Danish government extended the active part and reduced the passive part. Thus, Denmark has revised a previously very generous unemployment insurance system and implemented stricter eligibility rules and shorter duration of benefits (Torfing, 2004; Halvorsen and Jensen, 2004). The government has phased out the generous leave arrangements while the policy-makers are discussing how to dismantle the early retirement benefit. Before 1990 Finland was among the countries with the highest relative resource input for active measures in Europe. Then the economic recession, reinforced by the break-down of the export to the former Soviet Union, hit Finland hard. The level of unemployment remained high throughout the 1990s and into the new millennium. Finland did not manage to increase its activation efforts to match the growth in the unemployment rate (Hvinden et al., 2001). Several changes were made in the income support systems for the unemployed (generally implying shortened benefit periods and stricter qualifications requirements). However, it was not until 2001 that Finland
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introduced its major activation reform (the rehabilitative work experience act), which then was aimed at people at the margins of the labour market (long-term unemployed and social assistance recipients) (Sakslin and Keskitalo, 2005). In Norway, the discussion about reinforcing the workline started earlier than in the other Nordic countries. From the late 1980s leading Norwegian politicians and policy experts expressed growing concern about the steep increase in social benefit expenditures and the number of people receiving benefits. Expert committees and government departments presented proposals for tightening the social benefit system and providing new resources for activation measures. Since the early 1990s, a number of reforms changed the rules for benefit levels, duration and/or eligibility for a number of social insurance benefits (e.g. unemployment, sickness, disability and single parent’s benefits) and modifying the regulatory framework for social assistance (Halvorsen and Jensen, 2004). Among the Nordic countries, Sweden has a tradition of strict work conditions in the unemployment insurance system, combined with large, expensive activation programmes. When hit by a serious recession in the early 1990s Sweden did not manage to keep up this high level of relative resource input (Benner and Bundgaard Vad, 2000; Hvinden et al., 2001). Arguably the de facto policy emphasis shifted towards providing income maintenance and renewing unemployed peoples’ rights to cash benefits. Later Sweden has not regained its uncontested position as world leader in active governance of citizens of working age. In the late 1990s, the Swedish government made several changes within the income protection system for unemployed persons. The government created even stricter qualifications for receiving unemployment insurance and curtailed recipients’ chances of renewing their entitlement to unemployment insurance through participation in different forms of labour market programmes. Unemployed citizens met stronger demands for geographical and occupational mobility as conditions for receiving benefits. This trend has continued since then and the government defined these changes as incremental (corrections of previous failures or anomalies), not fundamental (‘‘paradigmatic’’), as in Finland and Denmark. All in all, these changes are best pictured as, first, a reinvention of the work-line and, second, the reconstruction of a sharp discursive division between ‘‘passive’’ and ‘‘active’’ policies. They have led to a renewed emphasis on the duty dimension of the Nordic social protection systems. In contrast to recent modelling of activation policies, all the Nordic systems of unemployment insurance have been modified in the direction of stricter eligibility rules (e.g. required prior work and earnings record), shorter benefit periods and, in some instances, decreased benefit levels. In tandem with these reforms, the Nordic countries have expanded the activation programmes run by the state employment services. However, while the Nordic governments originally portrayed the male working class as the primary target for active labour market policies, the activation programmes introduced after the 1990s explicitly embraced a broader range of groups: men and women, people with impairments, single mothers, immigrants and young people with low qualifications. Hence all unemployed Nordic citizens receiving social benefits now have a general duty to be ‘‘active’’ according to the interpretation that the public authorities give the term. Expanding a local tier of activation governance An often disregarded aspect of the Nordic governance of activation is their local and second tier, i.e. the complex relationship between unemployed citizens receiving social
assistance and the public authorities’ efforts to activate them. How to activate unemployed social assistance recipients became a highly debated subject in the early 1990s. As the unemployment rate remained high, Nordic policy-makers claimed that traditional active labour market policies had lost their critical edge and above all had proved insufficient or unsuitable in relation to those identified as least capable and competent to enter the regular labour market. As elsewhere in Europe, recipients of social assistance were considered as at least partly to blame for their lack of sufficient income (Van Oorschot, 2006). They were identified as less responsible, capable or competent than other citizens in terms of finding and holding on to regular paid work, and therefore in need for strict discipline and control. Long-term unemployed and social assistance recipients became the target group for a new set of local activation policies largely administered and financed by the municipal social services. The governance of Nordic social assistance has undergone – at least – two common changes. First, we have witnessed a trend towards standardisation, making eligibility less dependent on local and professional discretion and social assistance payable as a fixed amount. Finland has included a right to a minimum income support in its constitution. Both Finland and Sweden have developed national standards for basic or subsistence payments to reduce local variation in outcome, while Denmark has created standardised rates for payments. Only Norwegian social assistance has retained most of its traditional characteristics, as a system based on local self-determination and, at best, locally agreed-on rates for social assistance payments (NOSOSCO, 2005). Second, the Nordic countries have established an additional local tier of activation governance. In all countries decision-makers at the municipal level are exercising wide discretionary power over the design, focus and contents of activation programmes. The development of municipal activation programmes was partly a response to the employment services’ lack of enthusiasm for and commitment to assisting unemployed citizens receiving social assistance. In addition, the staff in municipal administrations believed that they needed special activation measures to accommodate the particular background, situation and needs of some social assistance recipients. For a minority of their recipients, the municipalities in all the Nordic countries have adopted special work-for-benefit measures, i.e. ‘‘workfare’’ (Lødemel and Trickey, 2001). If a person fails to comply with the activity requirements stipulated by the municipality, or if he or she drops out of an activation measure, the municipality has the legal right to impose sanctions, e.g. reduce social assistance payments. However, since social assistance is a provision of last resort and for many recipients the only source of income, a complete withdrawal of benefits could have adverse personal consequences. While the practical tasks that activated recipients of social assistance have to carry out are not necessarily that different from before, the context – social assistance as last-resort support and the more restrictive requirements and sanctions that municipalities can impose – gives activation measures aimed at social assistance recipients a more compulsory, punitive character in the Nordic countries. As demonstrated in Table I, changes in Nordic social assistance regulations share the introduction of stronger legal duties on the part of the unemployed recipients, including the obligation to participate in different kinds of activation and the possibility of sanctions for those who do not accept activation offers. However, the table also illustrates different formal regulations as activation is only a duty, not a right, for social assistance recipients in Norway and Sweden. The weak legal regulation of activation in Norway and Sweden emphasises the differences in power between municipal authorities and unemployed citizens claiming social assistance.
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Table I. Framework for activating unemployed claimants of social assistance in four Nordic countries
Yes, to social complaints board
No, but possibility to appeal to county-level administrative officer
Yes, to administrative court
No national incentives, but some local incentives
Social workers may by discretion support labour market participation, by a small amount Yes, to administrative court
Clients’ possibilities to appeal to court
Not stipulated, social worker have the possibility to reduce or terminate allowance No national incentives, but locally existing Not stipulated, social workers have the possibility to reduce or terminate allowance
Legal reduction of benefit 20+20 per cent (if repeated)
Yes, reduction based on calculation on how many hours absence
Yes, detailed calculation on amounts for participation in activation programmes
No
No
Yes, if there are resources
Social Services Act (1998 and 2001) Yes, claimants must be available for activation offer: explicitly expressed for young under 25 years of age No
Yes
No
Yes, claimants must be available for activation offer, but no detailed legal regulation
Social Services Act (1991)
Sweden
Yes
Public use of economic incentives
Individual right to activation Public obligation to offer activation Public possibilities to economic sanctions
Individual obligation to be activated
The Rehabilitative Work Experience Act (2001) Yes, claimants must be available for activation offer, clearly stated in Act
Norway
Act on Active Social Policy (1998) Yes, claimants must be available for activation offer, younger than 30 years old (within three months), older than 30 years (within 12 months) Yes
Finland
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Legal Act
Denmark
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By contrast, Danish and Finnish social assistance recipients have obtained stronger legal rights to activation. These institutional differences are also reflected in the degree to which the governments have specified the municipalities’ scope for applying incentives and sanctions: Finland and Denmark have regulated this scope in detail, while Norway and Sweden have largely left it to local and professional discretion.
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Elements of voice and participation A neglected aspect of activation is the possibility policies and programmes provide for voice and participation in deliberation and decision-making. Activated recipients tend to have very limited possibilities for leaving activation programmes by choice (unless they are willing to risk losing their benefits). Some countries do, however, provide activated recipients with some power of influencing the contents of their activation offers. Among the Nordic countries, Finland has most explicitly focused on the joint development of individual action plans as an instrument for dialogue, cooperation and self-determination. In Finland, individual action plans can also be a tool for pressuring social workers and employment officers to consider the views of the client. Individual action plans and personal interviews are also central in Danish social assistance reforms, becoming one way of ensuring recognition of individual perspectives. Compared with their Finnish and Danish counterparts, neither the Norwegian nor the Swedish governments have instructed municipalities to develop such plans as part of their activation programmes. Although the employment services in Norway and Sweden have adopted individual action plans, they have not explicitly linked them to the activation of social assistance recipients. To what extent these joint meetings, discussions and action plans provide unemployed citizens claiming social assistance with real possibilities for individual voice, autonomy and self-determination is an issue for empirical research. Some directions in the burgeoning literature on governance challenge us to think of these individual approaches in activation in a new manner, arguing that they constitute new techniques or means of governance for public authorities to govern, control and/or discipline individuals beyond the formal authority of these agencies (e.g. Rose, 1999). Possibly, the growing complexity in society demands that the conduct of citizens can only be controlled effectively if citizens operate under the illusion that they are autonomous, able to pursue their own individual preferences, make choices and influence how the decisions of others affect their lives.
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Towards an integrated system of activation governance? What might support claims of a coherent and even universalistic model of activation in the Nordic countries are recent major reforms that have taken place in the first years of the new millennium. The development of a relatively large local tier of activation in the Nordic countries has created unexpected tensions in Nordic activation governance and reinforced the organisational separation between public employment services and the municipal social services. Arguments that decision-makers previously used to justify this development have recently been challenged and the administrative and categorical division between insured and uninsured citizens is now under revision. Three of the Nordic countries are currently enacting (or have just finished) major institutional reforms that aim to change the interface between central and local administrations of income maintenance and employment promotion (Johansson, 2006). These changes in Denmark, Finland and Norway have much in common. To achieve better coordination or integrated approaches to activation, these institutional reforms
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aim at introducing ‘‘one-stop’’ models by restructuring and merging previously separate agencies. In each of the countries, the division between agencies administering social insurance, social assistance and employment assistance will partly disappear through mergers, and partly diminish through the sharing of office facilities or mandatory inter-agency team models. Governments hope that these administrative changes will improve both the effectiveness of activation measures and prospects for social assistance recipients to find work. Moreover, governments hope that the fact that unemployed citizens will be activated by one public authority irrespective of their position in the social protection system (insured vs uninsured) will also strengthen the legitimacy of these authorities and policies and stop citizens from ‘‘falling between administrative stools’’. Conclusions In this article, we have argued that recent typologies of national approaches to activation have failed in capturing the complexity of activation in the Nordic countries and the variation among them. First, Nordic activation rests on a long tradition of systematically submitting unemployed citizens to work requirements. Despite variation over time, policy beliefs such as the workline or the work ethic have played and still play a key role in regulating the status of citizens in the Nordic welfare states. The Nordic welfare states have accepted a broad obligation to provide citizens with job opportunities and entitlements to generous benefits; however, under the condition that citizens accept and act in accordance with the work ethic. The variation between the Nordic countries is considerable, which indicates that it is quite open as to what is gained by postulating that we find one model of activation, whether labeled ‘‘Nordic’’ or ‘‘universalistic’’. Yet the revival of the workline in the 1990s has in some respects made the Nordic countries more alike. Broadly speaking, all citizens of working age in the Nordic countries are now facing the same work requirements. Moreover, the Nordic governments are combining capacity-building and incentive-strengthening approaches, seeing them as complementary, rather than mutually exclusive. Second, the Nordic approaches to activation are neither egalitarian nor unified. We have shown that the Nordic countries rely on two tiers of activation, largely reflecting the dual structure of the income protection system. There are reasons to believe that social assistance recipients participating in municipal activation measures are more exposed to paternalistic control and punitive treatment than participants in active measures for recipients of unemployment or disability insurance. However, recent efforts by Nordic governments to integrate the two tiers of activation have the potential of creating one unified Nordic model of activation and, possibly, an egalitarian approach to activation. Despite differences in target groups and organisational profile, Denmark, Finland and Norway have all enacted institutional reforms that combine several aims: to streamline the workline, strengthen work requirements in income security provisions, bring together competences and create multi-professional teams of activation officers; and hence provide unemployed citizens with one gateway to all public activation measures. It is still too early to talk about a common Nordic model, as current changes rather point towards quasi ‘‘one-stop-shopmodels’’. Key legal regulations have not been changed to fully support the new administrative structure, some activation services and decision-making procedures are still left out of the new organisation, and the actual integration of different professional groups is possibly only a formal construction. Moreover, as these organisations are
only in the making, to what extent the Nordic governments will succeed in their ambitions and if integrated services will provide better, more varied and even individually oriented services is an issue that calls for critical empirical assessments. Possibly we will see the development of a Nordic model of activation that is universalistic in the sense that it provides active measures that are tailor-made to every unemployed citizen’s individual requirements and not only fulfilling the work requirements of public authorities! References Barbier, J.-C. (2004), ‘‘Systems of social protection in Europe: two contrasted paths to activation and perhaps a third’’, in Lind, J., Knudsen, H. and Jørgensen, H. (Eds), Labour and Employment Regulation in Europe, P.I.E.-Peter Lang, Bruxelles, pp. 233-53. Barbier, J.-C. and Ludwig-Mayerhofer, W. (2004), ‘‘Introduction: the many worlds of activation’’, European Societies, Vol. 6 No. 4, pp. 423-37. Benner, M. and Bundgaard Vad, T. (2000), ‘‘Sweden and Denmark: defending the welfare state’’, in Scharpf, F.W. and Schmidt, V.A. (Eds), Welfare and Work in the Open Economy, Vol. II, Oxford University Press, Oxford, pp. 399-466. Esping-Andersen, G., Gallie, D., Hemerijck, A. and Myles, J. (2002), Why Do We Need a New Welfare State?, Oxford University Press, Oxford. Eurostat (2006), ‘‘European social statistics, Social protection, Expenditure and receipts’, Office for Official Publications of the European Communities, Luxembourg, available at: http:// europa.eu.int (accessed 1 May 2006). Ferrera, M. and Hemerijck, A. (2003),‘‘Recalibrating Europe’s welfare regimes’’, in Zeitlin, Z. and Trubek, D.M. (Eds), Governing Work and Welfare in a New Economy, Oxford University Press, Oxford, pp. 88-128. Goul Andersen, J. and Pedersen, J.J. (2006), ‘‘Continuity and change in Danish active labour market policy: 1990 2000’’, paper presented at the International Conference on Welfare State Change, St. Restrup, Denmark, 13-15 January. Hall, P.A. (1993), ‘‘Policy paradigms, social learning and the state: the case of economic policymaking in Britain’’, Comparative Politics, Vol. 25 No. 3, pp. 275-96. Halvorsen, R. and Jensen, P.H. (2004), ‘‘Activation in Scandinavian Welfare Policy. Denmark and Norway in a comparative perspective’’, European Societies, Vol. 6 No. 4, pp. 461-83. Hvinden, B. (1994), Divided Against Itself, Scandinavian University Press, Oslo. Hvinden, B., Heikkila¨, M. and Kankare, I. (2001), ‘‘Towards activation? The changing relationship between social protection and employment in Western Europe’’, in Kautto, M., Fritzell, J., Hvinden, B., Kvist, J. and Uusitalo, H. (Eds), Nordic Welfare States in a European Context, Routledge, London, pp. 168-97. Johansson, H. (2001), I det sociala medborgarskapets skugga. Ra¨tten till socialbidrag under 1980och 1990-talen, Arkivs avhandlingsserie 55, Lund. Johansson, H. (2006), Svensk aktiveringspolitik i nordisk perspektiv, Expertgruppen fo¨r studier i samha¨llsekonomi (ESS) Rapport, Vol. 3, Ministry of Finance, Stockholm. Lødemel, I. and Trickey, H. (Eds) (2001), An Offer you Can’t Refuse, The Policy Press, Bristol. Marklund, S. and Svallfors, S. (1987), Dual Welfare: Segmentation and Work Enforcement in the Swedish Welfare System, Department of Sociology, University of Umea˚, Umea˚. NOSOSCO (2005), Social Protection in the Nordic Countries 2003, Nordic Social Statistics Committee, Copenhagen. Rose, N. (1999), Powers of Freedom: Reframing Political Thought, Cambridge University Press, Cambridge.
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Sakslin, M. and Keskitalo, E. (2005), ‘‘Contractualism in the Finnish activation policy’’, in Sol, E. and Westerveld, M. (Eds), Contractualism in Employment Service, Kluwer Law International, The Hague, pp. 359-82. Torfing, J. (2004), Det stille sporskifte i velfærdsstaten. En diskursteoretisk beslutningsprocesanalyse, Magtutredningen, Aarhus Universitetsforlag, Aarhus. Van Oorschot, W. (2006), ‘‘Making the difference in social Europe: deservingness perceptions among citizens of European welfare states’’, Journal of European Social Policy, Vol. 16 No. 1, pp. 23-42. About the authors Ha˚kan Johansson is researcher and lecturer in social work at the School of Health Sciences and Social Work, Va¨xjo¨ University, 351 95 Va¨xjo¨, Sweden. His interests include citizenship theory, social citizenship, comparative social policy and European social policy. He has recently completed an interdisciplinary research project on the turn to more active forms of citizenship, comparing the Nordic countries with France, Germany and the UK (together with Prof. Bjørn Hvinden and funded by the Nordic Council of Ministers). Recent publications include Citizenship in Nordic Welfare States: Dynamics of Choice, Duties and Participation in a Changing Europe (Routledge, 2007). Ha˚kan Johansson is the corresponding author and can be conducted at:
[email protected] Bjørn Hvinden is Head of Research at NOVA Norwegian Social Research, PO Box 3223 Elisenberg, 0208 Oslo, Norway. He is also Professor of Sociology (on leave), Norwegian University of Science and Technology, Trondheim. His main research interests are comparative social policy, activation, citizenship, European integration, disability and international migration. He is currently involved in a cross-national comparative study about social regulation of ICT to ensure accessibility and usability for persons with disabilities.
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