What is the causal relationship between population size and the contracting out of public service delivery in local governments? The size of the population of a given municipality has long been thought to be an important driver of contracting out public service delivery, which theoretically streamlines public service production and saves taxpayers’ money. This article makes use of the 2007 Danish local government structural reform—when 239 municipalities were merged into 66 new entities while 29 municipalities remained untouched—as a quasi-experiment to explore the population size/contracting out relationship. Results show that the relationship differs across policy sectors: It is negative for services with high fixed costs, presumably due to scale economies, and is positive for services that are difficult to measure, probably due to more administrative and technical capacity in larger municipalities. Also, the effect of population size is positive for tasks in free-choice markets, presumably because private contractors find large free-choice markets more attractive.

Privatization varies considerably among local governments. One of the oft-listed explanations is the ability of public employees to block privatization. However, many studies on the influence of public employees on privatization do not use very precise measures of the influence of public employees, they have been unable to isolate a one-way effect, and the studies have not been attentive to whether the effect varies for different market forms. In this article, we focus on privatization in Denmark through a voucher market without price competition for eldercare services. Using new data for all 98 Danish municipalities in 2012, we are able to measure the strength of the public eldercare union as well as the number of the public eldercare workers relative to the number of local voters. We find that the increased union strength measured in terms of union density at the municipal level leads to substantially and significantly less privatization through the voucher market. By comparison, the estimated relationship between the relative number of public workers and privatization does not reach statistical significance. Features of the voucher market and qualitative evidence suggest that the union influence primarily goes through a direct user channel, that is through union influence directed at the service users, while a minor effect possibly runs through a political channel, that is lobbying directed at the local politicians.

Denne artikel undersøger sammenhængen mellem økonomisk pres og spareadfærd i politiske organisationer. Sammenhængen undersøges via casestudier i 6 danske kommuner, som alle oplevede en stigning i det økonomiske pres fra 2009 til 2013. Data består af 7-10 interviews i hver kommune samt tal for casekommunernes serviceudgifter og økonomistyring. Artiklen finder, at casekommunerne særligt har reduceret udgifterne via stordriftsløsninger på skole-, dagtilbuds, administrations- og kulturområdet samt serviceomlægninger på ældreområdet og det specialiserede socialområde. Derudover tyder casestudierne på, at en managementdrevet og inkrementel spareadfærd vinder frem under økonomisk pres, mens spareadfærden synes mindre drevet af stærke interessegrupper. Det vises også, at styrken af det økonomiske pres ikke i sig selv forklarer casekommunernes spareadfærd, og det foreslås i stedet, at en given spareadfærd kan forstås ved samspillet mellem det økonomiske pres og hvorvidt årsagen til presset opleves som udefrakommende eller selvforskyldt.

Should the public sector become more like the private sector? This is a key question in debates about public management. However, the public/private distinction includes many elements. Two of these are ownership and competition. These aspects are not always sorted out empirically. Another challenge is that dissimilar functional areas are studied which makes it difficult to isolate effects of privatization as such. We respond to these challenges by carrying out an empirical analysis of job satisfaction among teachers who teach Danish to immigrants. The teachers work in comparable schools, carry out the same task, and are subject to the same performance management system, but some of the schools are public, some are private, and some have been subject to competitive tendering. We demonstrate that competition has a greater impact than ownership upon job satisfaction. We also show that one of the key mechanisms which translate competition into reduced job satisfaction relates to changing relations between managers and employees. Advocates and opponents of privatization alike should pay more attention to specific aspects and mechanisms related to privatization, in particular the element of competition.

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