List of Tables and Figures. Notes on the Contributors. Acknowledgements. RECWOWE Book Series: Work and Welfare in Europe

Transcription

1 Contents List of Tables and Figures Notes on the Contributors Acknowledgements RECWOWE Book Series: Work and Welfare in Europe Funding vii ix xiv xv xvii 1 The Governance of Active Welfare States 1 Rik van Berkel, Willibrord de Graaf and Tomáš Sirovátka 2 The Administration of Income Provision and Activation Services 22 Rik van Berkel 3 Accelerating Governance Reforms: the French Case 38 Anne Eydoux and Mathieu Béraud 4 Fragmented Governance Continued: the German Case 62 Irene Dingeldey 5 Steering with Sticks, Rowing for Rewards: the New Governance of Activation in the UK 85 Sharon Wright 6 The Governance of Activation Policies in Italy: from Centralized and Hierarchical to a Multi-Level Open System Model? 110 Paolo R. Graziano and Annelies Raué 7 The Liberal Governance of a Non-Liberal Welfare State? The Case of the Netherlands 132 Rik van Berkel and Willibrord de Graaf 8 Marketization in a Federal System: New Modes of Governance in Unemployment Insurance and Social Assistance in Switzerland 153 Franziska Ehrler and Fritz Sager v

2 vi Contents PROOF 9 Governance of Activation Policies in the Czech Republic: Uncoordinated Transformation 173 Tomáš Sirovátka and Jiří Winkler 10 Decentralization and Back to Centralization: the Swedish Case 195 Renate Minas 11 Governance of Integrated Activation Policy in Finland 216 Vappu Karjalainen and Peppi Saikku 12 The Governance of Active Welfare States in Europe in a Comparative Perspective 237 Rik van Berkel, Willibrord de Graaf and Tomáš Sirovátka Index 264

3 1 The Governance of Active Welfare States Rik van Berkel, Willibrord de Graaf and Tomáš Sirovátka Introduction All over Europe, activation or active labour-market policies have become important instruments to promote the transition from welfare to work, that is, to (re)integrate unemployed people dependent on social insurance or social assistance in the labour market. Activation policies, that is programmes and services aimed at promoting the employability and labour-market participation of unemployed people, play a key role in making welfare states more activating and in reducing welfare state dependency. The European Employment Strategy, which contains specific guidelines with respect to the introduction of activation programmes, clearly endorses this orientation of social policies. European countries reveal significant variety in their activation strategies and policies: in the public expenditure on activation, 1 in the nature and content of activation programmes, in the coverage of programmes and in the treatment of various target groups, and so on (Barbier, 2004; Dingeldey, 2007). Nevertheless, the social problems of unemployment and welfare state dependency are dealt with in quite different ways nowadays in the European countries compared with, say, two decades ago. Social policy analysts have written extensively on this new trend in welfare states, comparing and analysing the content of activation programmes, the consequences of the activation of welfare state arrangements for unemployed people, the effects of programmes on labour-market (re)entry, etcetera (see, for example, Lødemel and Trickey, 2001; Gilbert, 2002; Van Berkel and Hornemann Møller, 2002; Handler, 2004; Serrano Pascual, 2004; Hvinden and Johansson, 2007; Serrano Pascual and Magnusson, 2007). These content-related aspects of active welfare state reforms are not the core topic of this book. Instead, in 1

4 2 The Governance of Active Welfare States PROOF this book we will look at another type of welfare state reforms, namely those that some have called reforms of operational policies (Carmel and Papadopoulos (2003) distinguish operational and formal policies, where the latter regulate substantial, content-related aspects of social policies and the former the organization of policy delivery). These reforms affect the ways in which the provision and delivery of social policies are organized or, put differently, the governance of social policies (Borghi and Van Berkel, 2007). The concept of governance has been widely discussed in the social sciences, and has been defined in a variety of ways (Rhodes, 2000; Newman, 2001; Hill and Hupe, 2002). For some authors, governance is practically synonymous with government. For example, for Kettl (2002, p. ix) governance is the way government gets the job done. Others argue that governance refers to a change in the meaning of government, referring to a new process of governing; or a changed condition of ordered rule; or the new method by which society is governed (Rhodes, 2002, p. 209). In this context, governance may be an umbrella concept referring to a variety of forms of governance. Rhodes (2002), for example, distinguished six uses of the concept of governance. It may also have a more narrow and specific definition, such as Jessop s (2003, p. 101): the reflexive self-organisation of independent actors involved in complex relations of reciprocal interdependence, with such self-organisation being based on continuous dialogue and resource-sharing to develop mutually beneficial joint projects and to manage the contradictions and dilemmas inevitably involved in such situations. For the purpose of this book, an encompassing rather than specific definition is more adequate, as we want to be able to distinguish various types, forms, models or regimes of governance. Rather than developing our own definition, the following definition of Kooiman and Bavinck (2005, p. 17) covers the way in which governance will be used in this book quite accurately: Governance is the whole of public as well as private interactions taken to solve societal problems and create social opportunities. It includes the formulation and application of principles guiding those interactions and care for institutions that enable them. Both the activation of unemployed people and providing them with income support are actions taken to solve societal problem and create social opportunities irrespective of questions regarding the desirability or effectiveness of these actions. In providing activation and income support, a range of both public and private actors is involved: national and municipal authorities; public or semi-public agencies such as benefit agencies, Public Employment Services (PES), welfare agencies; private actors such as reintegration companies, NGOs, employers

5 Rik van Berkel et al. 3 and employees organizations, and so on. The principles guiding these interactions are laid down in the operational policies mentioned before. They may regulate the tasks and responsibilities of both national, regional and local state actors; they structure interactions between public and private agencies (for example, through quasi-market or network principles) and between various public agencies (for example, through principles guiding inter-agency cooperation and coordination). Care for institutions that enable them points at the importance of supporting and facilitating public and private actors in contributing to the solving of societal problems, and to the processes of capacity building for policy implementation that, as we will see, is a recurrent issue in active welfare state reforms. Governance reforms have become increasingly important aspects of public sector and welfare state reforms in general, and of the delivery of income protection and activation programmes for unemployed people specifically. Elsewhere it has been argued that, although reforms of the governance of income protection and activation programmes cannot be seen in isolation from wider public sector reforms, the transformation of passive into active welfare states has created its own governance reform urgencies (Van Berkel, 2010). Following the definition of governance presented above, activation involves new actions to solve societal problems and create social opportunities, and these ask for a reconsideration of public as well as private interactions, for the principles underlying these interactions and for the organizational capacities that these actions require. For example, income provision and activation are integrated in active welfare states as part of the conditionality of income provision. In contexts where both functions are organized separately, inter-agency cooperation and coordination are considered necessary. In addition, activation services are an important instrument in promoting unemployed people s employability and labour-market participation. In particular where the long-term unemployed are concerned, individualized services are considered necessary to make activation successful, which may ask for local decision-making space in designing services or for the involvement in service-provision processes of a variety of providers of social services. In recent years, social scientific researchers have begun paying attention to these governance reforms in the policy areas of activation and income support programmes for unemployed people of working age. This has stimulated interdisciplinary approaches integrating insights and theories from the social policy, public administration and public management research fields. By now, publications are available on

6 4 The Governance of Active Welfare States PROOF a range of specific governance-related issues in these policy areas (see Van Berkel and Borghi, 2008), such as marketization (Struyven and Steurs, 2005; Van Berkel and Van der Aa, 2005), contractualism (Sol and Westerveld, 2005), inter-agency cooperation (Lindsay and McQuaid, 2008) and individualized service provision (Van Berkel and Valkenburg, 2007), whereas other publications focus on governance in a broader sense (Considine, 2001; Bredgaard and Larsen, 2005; Larsen and Van Berkel, 2009). This book aims to contribute to this relatively new strand in social scientific research. Research questions This book analyses and compares governance reforms in the policy areas of activation and income protection for unemployed people in nine European countries. The reason for focusing on these policy areas is that as mentioned before they have become more closely linked and integrated, partly as a logical consequence of the increasing conditionality of entitlements to income provision. The book covers the UK, Germany, France, Italy, Sweden, Finland, Czech Republic, the Netherlands and Switzerland; these countries represent Europe s diversity in various ways. The countries include both large and small European countries, and they also include social-democratic (Sweden, Finland, Netherlands), liberal (UK), conservative (Germany, France, Switzerland), southern European (Italy) and post-communist (Czech Republic) welfare states. In addition, they cover countries with above and below EU average public expenditures on labour-market policies (see note 1). And from a public administration point of view, the selection of countries discussed in this book includes countries with a conservative trajectory of public management reform, modernizers, as well as marketizers (Pollitt and Bouckaert, 2000). The book is the result of joint work by the authors in the context of a network of European researchers funded by the EU s 6th Framework Programme: Reconciling Work and Welfare (RECWOWE). Two sets of research questions will be addressed in this book, the first addressing the nature of governance reforms. What governance reforms have been taking place in the countries? In terms of the definition of governance used in this book, this question refers to the public and private actors involved in the provision of activation and income support, on the structure of their interactions and the principles guiding these interactions, as well as the ways in which these actors are equipped to carry out their tasks and responsibilities. In addition, these reforms

7 Rik van Berkel et al. 5 will be analysed in terms of various guiding principles of new modes of governance: new distributions of centralized and decentralized policy making and policy implementation responsibilities; the introduction of quasi markets, based on the principle of competition, in the provision of activation services and programmes; the promotion of inter-agency cooperation and partnerships involving the agencies traditionally responsible for these policy areas (social insurance funds, local welfare agencies and the PES), as well as other service providers; the introduction of new public management instruments affecting interactions between various levels of the state and interactions between national and local offices of public agencies. At a more abstract level, the question can be raised whether we see shifts of governance regimes in the countries involved in the study. The literature on governance distinguishes several of these governance regimes, which will be elaborated upon below. The second set of questions concerns the intended and unintended effects of the reforms. These questions can be approached from two points of view. First, one can evaluate whether or not governance reforms promote the labour-market participation of unemployed people: many of these reforms are justified by arguing that they support the reforms aimed at making welfare states more activating, and that they contribute to promote welfare-to-work transitions. In other words, governance or operational policy reforms are expected to support and promote the effective implementation of the new active welfare state paradigm. Secondly, the question can be raised on how governance reforms affect the nature and content of welfare state services, as well as the treatment and approach of the unemployed. Rather than interpreting new governance systems and structures as merely technical ways to get things done, that is, to administer benefit systems and effectively provide activation and employment services, we will address the issue of the impact of governance reforms on substantial characteristics of social policies: the nature, quality and responsiveness of services, the treatment of unemployed people in service provision processes, etcetera. The literature on active welfare state reforms has paid considerable attention to the ways in which substantial policy reforms affect the rights and obligations of unemployed people, and to the impact of modern welfare states on social citizenship (Peck, 2001; Gilbert, 2002; Handler,

8 6 The Governance of Active Welfare States PROOF 2004). This book wants to explore whether governance reforms may have similar effects. The remaining part of this chapter is structured as follows. In the next section, some of the main characteristics of, and guiding principles underlying governance reforms will be discussed. Then, attention will be paid to the literature on governance regimes. These sections provide the framework for analysing governance reforms in the following chapters. The fifth section of this chapter focuses on effects of governance reforms. In the final section, the structure of the book will be presented. Governance reforms: principles, actors, capacities In this section we will discuss some of the main principles underlying governance reforms that are discussed in the literature and are relevant for the social policy areas analysed in this book. In discussing these principles, attention will also be paid to the increasing diversity of actors involved in these policy areas, as well as to the issue of organizational capacities that welfare state reforms require. Decentralization In their comparative study of public management reform, Pollitt and Bouckaert (2000) deconstructed the concept of decentralization by distinguishing three strategic choices: Political decentralization versus administrative decentralization. In the first case, policy authority shifts from national government to regional or local elected political representatives. In the second, authority is shifted to some (formally independent) public agency. In the context of activation and employment policies, Mosley (2009) described this distinction in terms of a decentralization of policy responsibilities versus a decentralization of managerial discretion. Competitive versus non-competitive decentralization. This refers to the means by which authority is passed to an agency and whether or not competition is involved. Internal versus external decentralization. This refers to the issue of whether authority is passed within the organization or to an independent entity outside the organization. Focusing specifically on activation or employment services, Greffe (see OECD, 2003) has listed several reasons why national governments decide to opt for decentralization, most of which relate to societal

9 Rik van Berkel et al. 7 changes and policy responses to these changes that require policy making and/or policy delivery processes in proximity to the contexts and collective and individual actors involved: the multifaceted nature of unemployment, the increasing volatility of the labour market in a globalizing and knowledge-based economy, the aim to develop innovative solutions through local partnerships, the transformation of passive into active welfare states and for programmes aimed at promoting social inclusion in a broader sense than paid employment the identification and development of activities that can promote social participation. In the literature on decentralization in the context of activation or labour-market policies, the strategic choices distinguished by Pollitt and Bouckaert (2000) are clearly present (for example, Giguère, 2005). First, internal decentralization takes place in public agencies involved in benefit administration and providing activation services. For example, national agencies responsible for PES may decide to give regional/local agencies more room in making decisions regarding programme design and programme delivery, in order to increase their ability to adapt national policies to regional/local circumstances. Secondly, political decentralization occurs when national governments devolve policy competences to regional or local governments. Similar motives may be at stake here, namely providing regional or local actors with the authority to develop services and policy programmes that are adjusted to local labour-market circumstances or to the characteristics of local target populations. Thirdly, competitive decentralization takes place when quasi-markets are established for the provision of publicly financed services such as activation and employment services. We will return to this later in the chapter. Capacity building is considered to be a major issue in decentralization processes. Mosley argues that the decentralization of responsibilities for social policy programmes to regional or local levels requires, among others, being able to coordinate local actors, analyse local needs, develop appropriate strategies, implement programmes, monitor, control and evaluate performance, and comply with accountability standards that may be required by higher level authorities (Mosley, 2009, p. 37). In discussing the various strategic choices concerning decentralization, Pollitt and Bouckaert (2000, p. 85) make an important observation that is relevant in the context of our social policy areas as well: Centralization is also part of the picture: as some authority has been decentralized, simultaneously there have been significant instances of a tightening of central control and oversight.

10 8 The Governance of Active Welfare States PROOF In other words, when analysing governance reforms, we should focus on both decentralization and centralization trends. These trends may occur diachronically: periods of decentralization may alternate with periods of centralization, and vice versa (Pollitt, 2008). They may also take place synchronically, for example, when decentralization is accompanied by measures that should ensure that regional/local actors act in accordance with national policy objectives. In this context, the introduction of what has been called an incentive paradigm (Van der Veen and Trommel, 1999) in public administration and the use of new public management instruments (such as performance indicators, benchmarking processes, funding mechanisms) may influence local decision-making processes. Thus, even though decentralization does increase the room for local decision making and for tailoring activation programmes to local needs, the conditions under which decentralization takes place may put considerable constraints on the decisions local actors make, and may in practice function as a process of implicit centralization. Centralization may also take place as part of the capacity-building process. Municipalities may decide or be obliged to share resources with other municipalities in order to professionalize service provision processes. In several countries (for example, Denmark, the Netherlands), public administration reforms have been accompanied by mergers of municipalities in order to increase the scale at which local services are provided. Marketization and competition Another new form of governance in welfare-to-work programmes is the introduction of principles of subcontracting, marketization and competition in service provision, accompanied by splitting the roles of service purchaser and service provider. Although subcontracting does not necessarily have to take place in a competition context (Sultana and Watts, 2004), our focus here will be on using Pollitt and Bouckaert s (2000) terminology competitive decentralization. Markets for providing activation and employment services often reveal characteristics of quasi-markets: purchasing power does not come from the consumers of services (unemployed people) but from the state and state agencies that act as purchasers on the market (LeGrand, 1991). The idea behind the introduction of quasi-markets in service provision is that promoting competition will have a positive impact on the efficiency and effectiveness of services, on their quality and flexibility or responsiveness to local and individual needs, and on their price.

11 Rik van Berkel et al. 9 Markets of activation services may differ in numerous aspects. Firstly, the nature of the service purchasers may vary. Purchasers may be PES agencies or benefit agencies, and purchasing may take place at central, regional or local levels. In some cases, unemployed people act as purchasers (even though their purchasing power still comes from the state) through instruments such as vouchers, personal reintegration budgets or individual reintegration agreements (Sol and Westerveld, 2005; Kaps, 2009). Secondly, the nature of the providers may vary as well: they may involve (semi-)public agencies, private non-profit organizations and NGOs or private for-profit companies. Thirdly, the nature of contracts between purchasers and providers can be different. For example, Struyven et al. (2002) distinguish between classic contracts and trust contracts. Trust contracts are concluded for a longer time period than classic contracts, are less detailed in specification and involve more intense cooperation between purchaser and provider. Contracts may also differ in their underlying incentives for performance, for example, in terms of whether they are based on no cure, no pay or no cure, less pay mechanisms (Bruttel, 2005). Fourthly (partly related to the former), competition can vary in strength and in nature (for example, competition on price or on quality). Fifthly, the degree and nature of state regulation of the market can be different: states can rely on market selfregulation or decide to introduce regulations concerning, for example, market access, price, or nature of services. In addition, states can oblige the agencies that act as purchasers to outsource services fully or partially, or can leave this decision with the agencies. Finally, the roles of, and distribution of tasks between, purchasers and providers can be different. For example, purchasers can act as referral agencies, leaving decisions about the nature of services to the providers; or they may intervene more directly in individual activation processes of clients (Jewell, 2007). These examples of market diversity make clear that apart from the question of whether countries introduce quasi-markets for the provision of activation services, the characteristics of these markets are also an interesting research topic. Once again, building organizational capacities to enable public agencies to act as purchasers in the service market is an important topic. These agencies will have to gain insight into the market, the providers and the kind of services that their clients need, to develop tendering procedures and monitor the performance of providers, and to decide about how they want to design relationships with external providers. Of the various new forms of governance, marketization has probably been discussed and investigated most (Considine, 2001; Bredgaard

12 10 The Governance of Active Welfare States PROOF and Larsen, 2005; Sol and Westerveld, 2005; Struyven and Steurs, 2005; Van Berkel and Van der Aa, 2005). These studies make clear that quasimarkets for the provision of activation and employment services are not a typical liberal welfare state phenomenon. Even though the USA and Australia were the first to introduce quasi-markets, they can now be found in all welfare regime types, as later chapters will illustrate. Inter-agency cooperation and partnerships Inter-agency cooperation and partnerships are the third principle underlying new forms of governance. We will use inter-agency cooperation to denote cooperation between public agencies traditionally involved in benefit administration and employment services: benefit agencies, local welfare agencies and PES. Strictly speaking, it is not a new form of governance (Newman, 2001), but nevertheless, major reforms aimed at promoting inter-agency cooperation have been taking place across the EU. Cooperation between these agencies can be promoted for several reasons: The increasing conditionality of income support requires exchange of information regarding the activation activities of unemployed people and their compliance with obligations. Coordination between income protection schemes may be needed to promote efficient and effective activation of unemployed people and to prevent transferrals between income protection programmes. Service coordination and integration may also be promoted in order to make services more accessible and user friendly. Inter-agency cooperation can take a variety of forms. For example, agencies can bring their front offices together under one roof, or establish a new agency in which their front office activities are shared and direct client contacts take place. These so-called one-stop agencies should prevent the requirement for clients to be referred from one agency to another, or from one counter to another. More far-reaching forms are possible too, and may involve full mergers of formerly independent agencies. Partnerships involve more far-reaching forms of cooperation and coordination than inter-agency cooperation, in the sense that they include a large range of public and private actors in service provision. They are a new form of governance proper: according to Jessop (2000), they are a response to the failures of (quasi-)markets without a return to the state which, in his view, was politically and ideologically

13 Rik van Berkel et al. 11 unacceptable. Geddes and Benington (2001, p. 2) argued that partnership is a concept to promote integration both vertically (between different tiers of government European, national, regional, local and grass roots) and horizontally (between different spheres of society public, private, voluntary and civil). Partnerships are attempts to govern complex social problems, and in the context of social security and activation are considered a fruitful approach in providing services for the long-term and most vulnerable groups of unemployed, who at least in a significant number of cases are not only confronted with problems regarding labour-market participation, but also with problems in areas such as housing, drug addiction, health, debts, or child care. A study of partnerships carried out in the 1990s by the European Foundation for the Improvement of Living and Working Conditions (Geddes, 1998) identified several factors that contribute to building partnerships and directly refer to the capacity-building issue: an identification of the benefits gained by cooperation; strong leadership; skilled management and staff; strong shared local identity; active participation of all partners in strategic decisions and implementation; seeing new solutions to problems; obtaining new resources, as well as maintaining a solid resource base; appropriate skills training and development. New public management In many publications, new public management is defined in a broad sense as a new public administration paradigm that includes several of the guiding principles underlying interactions between public and private actors, as discussed above. For example, Carroll and Steane (2002, p. 196) write that new public management is a form of public management 1. whose proponents affirm that private sector management models and techniques can be applied in the public sector; 2. that is associated with a commitment to plural models of the provision of public services by a mixture of business, the non-profit sector and government actors, emphasizing the importance of cost, choice and quality in the precise mix of service providers; 3. that is associated with a revised role for government in the provision of public services, characterized as steering not rowing ; 4. that expresses a strong belief in the role of the market and quasimarket mechanisms in coordinating the supply and demand for public services and the use of contractual mechanisms for the governance of provision;

14 12 The Governance of Active Welfare States PROOF 5. that attempts a separation of the political decision-making processes from the management of public services. In this book, we will use the concept of new public management in a somewhat narrower sense, focusing on the principles guiding the ways in which national governments steer public agencies and manage their conduct and, more specifically, their performance. Newman (2001) used the concept of politics of performance in this context, highlighting the pivotal role of results and effects in the new public management. Van der Veen and Trommel s (1999) concept of incentive paradigm emphasizes that active welfare states are based on an image of human conduct which not only includes the conduct of unemployed people but also of collectivities such as public agencies and other actors involved in social policy making and implementation that is driven by economic and rational calculations: Citizens and organizations are motivated by self-interest (or organizational interest), and will always weigh the costs and benefits of conformist behavior. In such a model, the public interest requires that these calculations are influenced in such a way that self-interest (or organizational interest) corresponds as far as possible with public goals. Van der Veen and Trommel (1999, p. 294) In their volume on contractualism in employment services, Sol and Westerveld emphasize the importance of management by objectives and what they call internal public contracts which are aimed at managing public actors by means of agreements on outputs and are directed at demarcating the playing fields for PES and lower-level public authorities such as municipalities (Sol and Westerveld, 2005, p. 384). This literature shows that new public management is characterized strongly by performance steering and by using incentives and disincentives as steering mechanisms. One of the core issues in debates about new public management is the issue of how to define performance indicators and what to measure in performance measurement. In their famous book on the entrepreneurial state, Osborne and Gaebler (1992, pp ) provide the following overview of performance indicators in the context of welfare-to-work programmes, that clearly show the political nature of decisions regarding selected indicators (Table 1.1).

15 Rik van Berkel et al. 13 Table 1.1 Performance indicators in welfare-to-work programmes Indicator General definition Welfare-to-work Output (or process) Outcome (or result) Programme outcome Policy outcome Programme efficiency Policy efficiency Programme effectiveness Policy effectiveness Volume of units produced Quality/effectiveness of production: degree to which it creates desired outcomes Effectiveness of specific programme in achieving desired outcomes Effectiveness of broader policies in achieving fundamental goals Cost per unit of output Cost to achieve fundamental goals Degree to which programme yields desired outcomes Degree to which fundamental goals and citizens needs are met Numbers of people trained Numbers of people placed in jobs, working and not in receipt of welfare after six months, one year and beyond. Impact on their lives Numbers placed in jobs, working and not in receipt of welfare after six months, one year and beyond. Impact on their lives Percentage of potential work force unemployed, on welfare and in poverty; percentage of welfare population in receipt of welfare more than one year, five years Cost per job trainee; placement; retained job, etcetera Cost to achieve desired decrease in unemployment, poverty rate, welfare caseload Numbers placed in jobs, working and not in receipt of welfare after six months, one year and beyond. Impact on their lives Effect on larger society: for example, poverty rate, welfare caseload, crime rate, later spending to remediate poverty Derived from Osborne and Gaebler (1992), Appendix B. Governance regimes Another, though not completely different, theoretical perspective for analysing governance reforms comes from the literature on governance regimes. These regimes can be interpreted as ideal-type governance

16 14 The Governance of Active Welfare States PROOF models and can be helpful in identifying broader governance reform trends. Newman (2001) distinguished four models of governance: the hierarchy model, the rational goal model, the open-system model and the self-governance model. These models are described as follows (Newman, 2001, p. 38): The hierarchical model corresponds with what others (for example, Denhardt and Denhardt, 2000) called the old public administration, and is oriented towards control, predictability and accountability and based on formal authority. The rational goal model captures the new public management reforms in a broad sense, with their strong emphasis on performance and (dis)incentives. It is oriented at maximization of output and outcome as well as economic rationalism, and based on managerial power. The open-system model is most closely related to the partnership model mentioned before. Its focus is on flexibility, expansion and adaptation, and it is based on flows of power within networks (network governance is a concept more or less akin to this model of governance). The self-governance model is a governance model that is absent in most of the other governance literature, although some of its characteristics will sound familiar. It is oriented towards devolution, participation and sustainability, and based on citizen and community power. Considine s (2001) study of the public management of welfare-towork is one of the studies that does not specifically distinguish a self-governance model. This exemplifies the concept that citizen or community power is particularly underdeveloped in governing the social problems of unemployment and social exclusion, which in the context of active welfare states are so often constructed in terms of individual responsibilities and obligations rather than individual entitlements and empowerment in as far as the concept of empowerment is present in the activation discourse, it refers mainly to the (rather paternalistic) notion that labour-market participation will empower citizens rather than putting them in charge of their lives or, more specifically, their activation (Van Berkel and Valkenburg, 2007). Considine s study distinguishes four governance models. In this book, we will use these models as a heuristic typology in analysing and comparing the broader trends that characterize the often numerous specific governance reforms that have been taking place in the countries in this

17 Rik van Berkel et al. 15 study. Considine described these governance models in terms of four dimensions: the sources of rationality, forms of control, primary virtues and service delivery focuses that characterize each model. These four dimensions can be seen as an elaboration of the principles guiding the interactions between (both public and private) actors mentioned in the definition of governance discussed in the above. First, he distinguished procedural governance: its source of rationality is the law, the form of control used are rules, its primary virtue is reliability, and the service provision focus is on universal treatment. In other words, procedural governance resembles the old public administration or what Newman called the hierarchical model of governance. Newman s rational goal governance model is represented in two of Considine s types of governance: corporate governance and market governance. The sources of rationality are management in the corporate governance type, and competition in the market governance model. The forms of control used are plans and contracts respectively. Whereas the primary virtue in the corporate governance type is that it is goal-driven, being cost-driven is the primary virtue of the market governance model. This distinction is also present in the service delivery focuses: targets in the corporate governance model, prices in the market governance type. Interestingly, on the basis of his empirical research Considine concludes that the corporate and market governance types are in fact representing a single strategy: these two governance orientations, derived from the reform literature and previous research, are a single strategy. Officials do not distinguish them as alternate approaches, rather they successfully synthesize them into a new form (Considine, 2001, p. 149). Considine s fourth governance model is network governance, which more or less resembles Newman s open-system model of governance. Its source of rationality is relationships, its form of control co-production. The primary virtue of this type of governance is flexibility, and the service delivery focus is brokerage. Considine distinguishes two forms of network governance which are of relevance in the context of social security and activation policies. The first refers to collaboration between officials and organized interests, which in these policy areas focuses attention towards the role of the organized interests of employers and employees, which used to be and in several cases still is significant in many welfare states. In the second form of network governance, clients, suppliers and producers are linked together as coproducers (Considine and Lewis, 2003, p. 134). In general, we expect to find a trend away from the traditional procedural governance model. At the same time, it is more difficult to predict to what governance regime the reforms will lead us. Here, we need to bear in mind that in practice, we may find elements of all regimes, as

18 16 The Governance of Active Welfare States PROOF Martin (2001, p. 209) concluded: 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 coordinating service delivery. Effects of governance reforms The literature on new forms of governance often contains extensive lists of advantages or promises that proponents and advocates of these new forms of governance expect will result from their introduction. Decentralization is seen as promoting policy flexibility, the adaptability and responsiveness of policies and programmes to local needs and circumstances, and the capacities of local partnerships to develop integrated and tailor-made solutions to local problems (OECD, 2003; Mosley, 2009). Creating holistic approaches that deal with problems of silo management are seen as major advantages of networks and partnerships. They are also expected to be more innovative than traditional forms of governance, to improve effectiveness and efficiency of policies and programmes by mobilizing resources from a variety of actors and avoiding overlap in services, and to increase accessibility of services and client friendliness (Newman, 2001). The main advantages of quasi-markets for providing public services are expected to be effectiveness and efficiency. Introducing a split between purchasers and providers of services and competition between providers is expected to make services not only cheaper, but also of higher quality, less standardized and more client focused and tailor-made (Struyven and Steurs, 2003). Gains in terms of effectiveness and efficiency are also expected from the introduction of new public management in the public domain (Osborne and Gaebler, 1992). Of course, the real story will probably be a lot more complex than these rather straightforward hypotheses regarding the results of specific forms of governance. First of all, no such thing as a pure form of governance exists in practice: as we shall see, the governance of income protection and activation policies consists of a mix of governance regimes in all countries in our study. Secondly, as we saw above, forms of governance come in a variety of sorts. As Pollitt (2002) argued, although there may be convergence in talk, decisions, practices and (potentially) results concerning administrative change, ideas, practices and preferences differ considerably from country to country. Thirdly, governance practices and the implementation of governance reforms may deviate from governance models introduced by governments. From

19 Rik van Berkel et al. 17 the implementation literature we know that a variety of factors may explain this: for example, local actors interpretation of the reforms, the conditions under which they have to implement them, and their capacities to do so. In other words, the independent variable in studies of the effects of governance reforms is extremely complex and dynamic. As far as the dependent variable is concerned, that is, the effects of governance reforms, things are not much simpler, because the expected effects are various and there is considerable discussion on how they should be operationalized in effect studies; in addition, it is very hard to establish robust causal relationships between forms of governance and effects a common problem, of course, in many social scientific effect studies that take place in a complex and dynamic social environment. This book does not intend to present a sophisticated evaluation of effects of new forms of governance. Our scope is far more modest and explorative: we will try to map what insights into the effects of new forms of governance currently exist in the countries discussed in this volume. We will see that while there are indications for a large variety of effects, our knowledge of what mechanisms cause these effects is still very limited. In this book, not all possible effects will be studied; we will not focus on efficiency effects. Our main interest is in three types of potential effects of governance reforms. First, we are interested in the employment effects of the reforms (outcome effects), which includes (gross and net) impact on job placement, job retention and job quality. Secondly, we will look at what could be called output effects, including coverage and reach of programmes and services (which target groups are served and what proportions of target groups acquire access to services), service Table 1.2 Potential effects of governance reforms Type of effect Outcome effects Output effects Process effects Indicator Job placement Job retention Job quality Coverage and reach Service content and quality Range and variety Voice and choice Individualized service provision Rights, obligations, responsibilities

20 18 The Governance of Active Welfare States PROOF content and quality, and range and variety of programmes. Thirdly, we will distinguish process effects, which focus on the treatment and approach of unemployed people as well as their social status: voice and choice of people involved in activation, the individualized nature of the service provision process, as well as the rights, obligations and responsibilities of the unemployed. Table 1.2 summarizes these potential effects. Structure of the book Chapter 2 will present an overview of the main actors and agencies involved in the administration of income protection schemes and the provision of activation services for unemployed people in the countries discussed in this book. This chapter provides comparative background information on how social security and employment services are currently governed in the various countries. Chapters 3 to 11 are the core of the book. In these chapters, governance reforms in the areas of social security and activation will be discussed and analysed. Subsequently, the chapters will focus on the following countries: France, Germany, the UK, Italy, the Netherlands, Switzerland, Czech Republic, Sweden and Finland. Rather than providing an overview of all relevant reforms in the various countries, the chapters will focus on some main reform processes that have been taking place in the policy areas on which this book focuses. Thus, the chapters will provide an in-depth analysis of governance reforms and reform trends, rather than pretending completeness. In addition, each chapter will try to make an assessment of the effects of the reforms, in as far as insight into these effects is available in these countries. Chapter 12 will conclude the book with a comparative analysis of the reforms analysed in the previous chapters. Here, we will return to the framework that was outlined in this introduction to see what similar as well as dissimilar reform trends can be found in the various countries, what this tells us about the ways in which governance regimes have developed and are developing, and what from a comparative perspective can be said about the effects that these reforms have had. Note 1. According to Eurostat data, the EU countries spent 1.7 per cent of GDP labourmarket policies in 2007 (public expenditure). Individual EU countries public expenditure ranged from per cent of GDP in Estonia to per cent of GDP in Belgium. Public expenditure (2007) in the countries discussed in this volume is summarized in Table 1.3.

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