Market-Type Mechanisms and Public Service Equity: A Review of Experiences in European Public Services

Abstract

The introduction of market-type mechanisms into the public sector has been a feature of many of the reforms associated with the New Public Management. In seeking to benefit from the competitive pressures exerted through marketization, governments have hoped to gain improvements in public service efficiency in particular. Yet, concerns remain about the effects of marketization on how equitably public services are provided, with many suggesting that there is an inevitable trade-off between efficiency and equity that goes hand-in-hand with market-orientated reforms. In this paper, we consider evidence on what is known about the relationship between the introduction of market-type mechanisms in the European public sector and the efficiency and equity of service provision. Our analysis reveals that although market-type mechanisms sometimes result in worse service equity, there is only weak evidence of a trade-off between efficiency and equity. We go on to argue that the design and implementation of market-based reforms may be a more important determinant of their success, rather than their supposed intrinsic characteristics.

The Vexed Question of Market Stewardship in the Public Sector: Examining Equity and the Social Contract through the Australian National Disability Insurance Scheme

“…Research suggests that vulnerable citizens are less likely to reap the benefits of market‐based service reforms (Anttonen ; Booltink et al . ; Botti and Iyengar ; Dan and Andrews ; Jilke ). Jilke (), for example, found that socio‐economic position is a significant determinant of the quality of services citizens will receive and their ability to switch from unsatisfactory providers.…”

“…It has been argued that there is a trade‐off between equity and efficiency (Amirkhanyan ; Lerner ; Stiglitz ) and this was certainly found to be a concern amongst our participants. However, it is important to note that this is not borne out in the evidence to date, suggesting it may be a false dichotomy (Dan and Andrews , ). This would indicate that governments can engage in more stewardship type behaviour (to protect equity) without undermining the efficiency gains of markets.…”

“…Our data supports this ambiguity; the system for identifying and addressing emerging issues is currently informal and unfixed in the NDIS implementation; however, this will be more formalized when the proposed Quality and Safeguards Framework has been finalized. Research suggests that vulnerable citizens are less likely to reap the benefits of market-based service reforms (Anttonen 2012;Booltink et al 2015;Botti and Iyengar 2006;Dan and Andrews 2016;Jilke 2015). Jilke (2015), for example, found that socioeconomic position is a significant determinant of the quality of services citizens will receive and their ability to switch from unsatisfactory providers.…”

The Barriers To Implementation Of New Public Management Strategies In Iran’s Primary Health Care: A Qualitative Study

“…Improvements in public service efficiency is the aim of implementation of this element. As an instance, Italy implemented contracting out in health care but lack of strategic planning and restricted efficiency gains through high transaction costs led to decrease in access and no change in efficiency 54 . It is reported that lack of effective patient charters and complaints system and informal payments had a negative effect on access and efficiency in Czech Republic, Russia, Ukraine, and Armenia health care system 55,56 .…”

Once bitten, twice shy? Lessons learned from an experiment to liberalize price regulations for dental care

“…Throughout recent years and decades, a number of European countries have liberalized their health care systems to various degrees [2,3]. The introduction of market mechanisms is intended to improve the quality of care and to contribute to cost containment.…”