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The Marketization of Employment ServicesThe Dilemmas of Europe's Work-first Welfare States$
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Ian Greer, Karen N. Breidahl, Matthias Knuth, and Flemming Larsen

Print publication date: 2017

Print ISBN-13: 9780198785446

Published to Oxford Scholarship Online: August 2017

DOI: 10.1093/oso/9780198785446.001.0001

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Governance Implications

Governance Implications

Dilemmas and Tradeoffs

(p.139) 6 Governance Implications
The Marketization of Employment Services

Ian Greer

Karen Breidahl

Matthias Knuth

Flemming Larsen

Oxford University Press

Marketization creates four dilemmas that lead to change in governance. (1) Cost versus quality: squeezing prices siphons resources out of services that could be used to employ qualified workers on the front line, and the prescription of services that price-based competition requires drains the capacity of providers to innovate. (2) Payment by results versus equal access to services: while payment by results is consistent with the ethos of market governance it bears the risk of “creaming and parking.” (3) User choice versus user compulsion: NPM principles of consumerism are difficult to reconcile with the principles of compulsion built into the work-first welfare state. (4) Openness/transparency and transaction costs: openness, transparency, and equal treatment require costly administrative capacity. Insourcing provides one solution by taking services out of the market, but it is not a panacea.

Keywords:   cost, quality, payment by results, creaming and parking, user choice, compulsion, transparency, transaction costs, insourcing, governance

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