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Stress-Testing a Quasi-Market: Unintended Consequences of the Swedish School Voucher System

Author

Listed:
  • Bergh, Andreas

    (Department of Economics, Lund University, and)

  • Wernberg, Joakim

    (Department of Technology and Society, Lund University, and)

Abstract

Quasi-markets in the provision of public services are increasingly common but also highly contested. We formulate a conceptual framework based on economic theory to describe how quasi-markets differ from traditional markets in five aspects: 1) revenues, costs, and profits; 2) the matching of supply and demand; 3) competition; 4) structural change; and 5) rent-seeking. Using the assumption of profit-maximizing actors, we provide a stress test of quasi-market design and highlight how these differences affect incentives and expected outcomes. Applying the framework to the Swedish school voucher system, we show how design decisions have generated unintended consequences that are detrimental to service quality and run counter to policy goals.

Suggested Citation

  • Bergh, Andreas & Wernberg, Joakim, 2024. "Stress-Testing a Quasi-Market: Unintended Consequences of the Swedish School Voucher System," Working Paper Series 1505, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:1505
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    References listed on IDEAS

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    1. Henrekson, Magnus & Wennström, Johan, 2019. "‘Post-truth’ schooling and marketized education: explaining the decline in Sweden's school quality," Journal of Institutional Economics, Cambridge University Press, vol. 15(5), pages 897-914, October.
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    More about this item

    Keywords

    Quasi-Markets; School vouchers; Market structure; Public administration;
    All these keywords.

    JEL classification:

    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration

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