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Marketization and Economic Performance

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  • Morten Balle Hansen

Abstract

The public management reforms of the past three decades have been characterized by organizational innovations usually associated with New Public Management (NPM) and reinventing government. In particular, neoliberal ideas of strengthening market mechanisms in the public sector have been prominent. In the empirical literature focusing on the consequences of marketization, most studies have examined technical services such as refuse collection while very few have focused on the social sector. In this article, an example of the general trend towards marketization conducted within the social sector is analysed. A reform enforcing compulsory competitive tendering in homecare for elderly people in Denmark is analysed and its relation to measures of economic performance is explored. Two competing models of marketization are contrasted in the analysis: a problem solving model inspired by public choice ideology, in which marketization processes are seen as driven by work-related concerns for efficiency and performance, and a macro phenomenological institutional model, in which innovation processes are seen as driven by factors related to hegemonic ideologies, legitimacy concerns and coercive enforcement. Very little impact on economic performance is found, which lends support to an institutional interpretation of the findings.

Suggested Citation

  • Morten Balle Hansen, 2010. "Marketization and Economic Performance," Public Management Review, Taylor & Francis Journals, vol. 12(2), pages 255-274, March.
    • Handle: RePEc:taf:pubmgr:v:12:y:2010:i:2:p:255-274
    DOI: 10.1080/14719031003616644
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    1. Prasad, Monica, 2006. "The Politics of Free Markets," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226679013, April.
    2. Pollitt, Christopher & Bouckaert, Geert, 2004. "Public Management Reform: A Comparative Analysis," OUP Catalogue, Oxford University Press, edition 2, number 9780199268498.
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    Cited by:

    1. Walker, Richard M. & Chen, Jiyao & Aravind, Deepa, 2015. "Management innovation and firm performance: An integration of research findings," European Management Journal, Elsevier, vol. 33(5), pages 407-422.
    2. Jun Zhang & Shuyang Li & Yichuan Wang, 2023. "Shaping a Smart Transportation System for Sustainable Value Co-Creation," Information Systems Frontiers, Springer, vol. 25(1), pages 365-380, February.
    3. Khosravi, Pouria & Newton, Cameron & Rezvani, Azadeh, 2019. "Management innovation: A systematic review and meta-analysis of past decades of research," European Management Journal, Elsevier, vol. 37(6), pages 694-707.
    4. Amadeo Fuenmayor & Rafael Granell & María Angeles Tortosa, 2016. "Quasi-markets Targets and the Evaluation of Nursing-home Funding in the Valencian Region," Hacienda Pública Española / Review of Public Economics, IEF, vol. 216(1), pages 13-38, March.

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