Bargaining Power, Political Transaction Costs and Institutional Change: Private and Public Dental Care in Denmark1

Rational choice institutionalism underexposes institutional change as well as the interaction between institutions at different levels, and this article therefore investigates national and local institutional change. In the Danish dental care sector private and public provision of services have coexisted since the establishment of a publicly financed dental health care system, and the fight between supporters of the two solutions has generated many institutional changes, both nationally and locally. This article analyses all Danish parliamentary proposals and local decisions regarding dental care coverage and provision. The general finding is that increasing pro-public bargaining power seems to promote higher coverage and public provision, while increasing pro-private bargaining power leads to stable coverage and private provision. The institutions do not, however, change whenever bargaining power changes, and national institutional change does not necessarily result in local change. The article explains this in terms of political transaction costs. These costs might also explain why national institutions change more often than local ones, and why local pro-public changes are faster and more frequent than local pro-private changes.     

Social Context,Institutional Capacity,and Police Services: A Local Public Economies Perspective

This article examines levels of policing services, focusing on an assessment of resources and their measurement for municipalities. Two measures of policing levels assess the reliability of the findings across alternative measurements. Social and institutional characteristics are explored to evaluate alternative explanations in policing efforts. The article presents four decades of census data for municipalities in metropolitan areas. The central finding is that unequal levels of policing are prevalent across American municipalities. An additional finding is that social and institutional contexts affect policing, based on a pooled time‐series analysis of municipal governments. Although its main contribution is to local public economies research, the research also integrates the social and institutional literatures to identify factors in the allocation of resources to policing.     

Institutions,distributional concerns,and public sector reform

Abstract. As in otherWestern countries, a wave of reform has swept the Danish public sector. The record of these reforms is mixed and paradoxical; an ambiguous delegation of executive authority and radical privatization have been successfully implemented, while other measures, especially contracting out and user democracy or the introduction of greater choice, turn out to have failed. The paper argues that this experience offers two general lessons. First, shortterm costs and benefits are decisive to those who enact and implement public sector reform. Second, institutional factors specific to each type of reorganization have a major impact on the political distribution of costs and benefits.     

Reform Politics through the Creation of Inefficient Political Institutions: The Case of the 2007 Danish Administrative Reform

This article poses the question of whether reform politicians' pursuit of institutional goods may, under certain circumstances, lead to the creation of inefficient political institutions. The theory of weakening political actors through the creation of inefficient political institutions, as elaborated by Terry M. Moe, is applied in a comparative analysis of two main elements in the recent Danish administrative reform: the consolidation of 270 municipalities into 98 larger ones, and the creation of five new macro regions with special responsibilities. In contrast to the coherent institutional structure of the municipalities, the level of coherence in the regional reform elements is inappropriate and inefficient. The article shows that the different institutions in the municipalities and the regions can be interpreted as an attempt by the (national) reform parties to prevent other political actors from gaining access to future substantial, as well as institutional, goods.     

Conservative Mobilization and Fiscal Policies

The two conservative parties in Norway, the old Conservative Party and the younger Progressive Party increased their electoral support from 23 percent in 1975 to 34 percent in the election of 1987. The electoral mobilization by these conservative parties was mainly based on an ideologically inspired rhetoric of reduced government spending and corresponding tax reductions. With the benefit of hindsight, it may be argued that these were policies to which the two parties did not live up. Whatever their political strength in the local arena, they were unable to reduce local government income taxes. But when analysing other fiscal strategies available to local governments we do find differences related to political strength, even if the findings are not always as expected. Municipalities dominated by the conservatives are run on the principle of families paying the actual costs of having children in public day-care institutions. But so are socialist-dominated municipalities. Conservative and socialist municipalities tend to subsidize fees for home-help services for the elderly. The main fiscal source of the conservatives is fees and charges on technical services used by every household and paid according to costs. The watershed between socialist and conservative parties appears as we analyse the use of property tax - a tax used much more frequently by socialist than by conservative and centrist parties.     

Politics of childcare policy beyond the left–right scale: Post‐industrialisation,transformation of party systems and welfare state restructuring

Childcare policy has become an integral part of social and economic policy in post‐industrial democracies. This article explores how the transformation of party systems structures the politics of childcare policy. It reveals that political parties contend with each other over childcare and female employment policy on the social‐value dimension as well as the redistributive dimension. Assuming that different party policies have distinct impacts on public childcare policy, it is hypothesised in this article that a government's policy position – composed of the governing parties' policy positions – affects changes in public spending for childcare services. Through an analysis of the pooled time‐series and cross‐section data of 18 advanced industrialised countries from 1980 until 2005 using multivariate regression methods, it is revealed that a government's redistributive left–right policy position interacts with its social liberal–conservative policy position, and that a left–liberal government raises its budget for childcare services while a left–conservative government does not.     

Institutional Reforms and Voluntary Associations

This article explores the changing relationship between the public and voluntary sectors. In 2007, a local government reform reduced the number of Danish municipalities from 271 to 98 and assigned new tasks to these. Consequently, the reform resulted in major local political and administrative changes, thereby giving a unique opportunity to examine how institutional changes affect the voluntary sector. Based on data from qualitative case studies and two questionnaire surveys (2004 and 2010) the article examines how the local government reform affects the relationship between the two sectors. The findings indicate that the political and administrative changes in the local political system have influenced municipality collaboration, contact and interaction with local associations. While some associations experience a decline in personal contact, there is an increase in formalization of the relationship and an increased degree of collaboration between the voluntary and public sectors.     

Similar Ends, Differing Means: Contractualism and Civil Service Reform in Denmark and New Zealand

State sector reform was an integral component of the radical economic and social policy changes enacted by New Zealand governments between 1984 and 1991. This reform replaced the traditional tenured public service with a contractual regime. Through a comparison with Denmark, it is shown that New Zealand's reforms were not unique. Similar reforms were enacted in Denmark. But contrary to what occurred in New Zealand, the Danish reforms had already begun in the 1960s, and have since been gradually expanded. The parallel contractual regimes introduced in the two countries are accounted for by an increasing demand among politicians to secure a civil service that is responsive to political executive demands. However, because of institutional differences and diverging regulatory regimes, the strategic approaches in the two countries have been different. Whereas the New Zealand approach was dominated by an appeal to a coherent and sophisticated body of theoretical knowledge, combined with strict formalization, the Danish strategy has been based on political bargaining with the civil service unions. In both cases the reforms rest on critical assumptions regarding their positive and negative implications.     

Why people want something for nothing: The role of asymmetrical illusions

Abstract. This article examines if and why mechanisms exist at the individual citizen level that may contribute to public sector growth — and whether such mechanisms can be altered through provision of information about the costs of public services.We test and find empirical support for the theory of fiscal illusion according to which citizens underestimate the costs of public services and therefore demand more public spending than if they had been fully informed. We also develop and find empirical support for a theory of asymmetrical illusions. This theory claims that producers and users of public services are more spending–minded than ordinary taxpayers — and that limited rationality contributes to this difference. However, the provision of information about the unit costs of public services can weaken these mechanisms of fiscal illusion and asymmetrical illusions. The test is based on tabular, logit, and experimental analysis of survey data from Odense, a Danish city with 175,000 inhabitants.     

A Prescription Rejected: Market Solutions to Problems of Public Sector Governance

The New Public Management includes the idea of incorporating market mechanisms in public sector governance. In the Danish case, market reforms have scarcely been used; private sector supplies of public services have not increased during the last decade. The lack of success of market reform in Denmark is explained by the strong institutions of traditional public sector governance operating at the micro-level. Formal and informal hierarchy and formal and informal corporatism hold a strong grip on public sector governance. The very decentralized structure of the Danish public sector decreases the importance of central government in terms of reform strategies. Strong interests and institutional constraints keep reforms in the Danish public sector within a hierarchical mode of governance.     

Contracting Out Local Services: A Tale of Technical and Social Services

Governments face a fundamental choice between in‐house production and contracting out for the delivery of services to citizens. This article examines the importance of ideology, fiscal pressure, and size for contracting out in technical and social services. The analysis builds on a panel data set covering municipal spending on services in all 98 Danish municipalities. The authors find that contracting out is shaped by ideology in social services but not in technical services, which indicates that social services are the contemporary ideological battlefield of privatization. The analysis further reveals that economically prosperous municipalities are more likely to contract out social services, whereas contracting out of technical services is not influenced by economic affluence. Finally, larger municipalities contract out more in technical services but less in social services, demonstrating that the size effect is contingent on the transaction cost characteristics of the service.     

Size,Democracy, and the Economic Costs of Running the Political System

The search for the optimal size of political systems is one of the most enduring in political thought. Given the validity of arguments for and against small units, one might expect variation in rearrangements of unit sizes. However, the reform trend is uniform: units, often at the local level, are amalgamated to harvest scale effects. The purpose of this article is to evaluate the argument on economies of scale in the economic costs of running political systems. Our testing ground is a recent Danish reform. It allows us to avoid endogeneity problems often facing researchers of size reforms. The reform was directed by the central government and constitutes an exogenous shock to 239 municipalities, whereas 32 municipalities were left untouched. We thus have a quasi‐experiment with pre‐ and posttreatment observations for both an experiment and a control group. Our findings show that scale effects, measured as administrative costs per inhabitant, are considerable.     

Newspapers and Budgeting: The Effects of Media Coverage on Local Expenditure Decisions

The media play an important role for the political agenda. It is less clear, however, how strong the media impact is on political decisions. This article pursues a different approach from the one commonly used in the media–policy research tradition. Instead of focusing on the relationship between the content of the media agenda and the political agenda, it is argued here that from a broader policy perspective, media pressure on the incumbents is a more relevant variable. Media pressure is measured as media competition and media coverage. Furthermore, the article investigates the effect of media variables on budgetary decisions in different spending areas, and compares the relationships between media pressure and policy under various economic, political and institutional conditions. This allows the authors to investigate which factors hinder and promote media influence on policy. The units of analysis are the Danish municipalities, which are similar political units with different newspaper coverage. Coverage by local newspapers is intense in some municipalities, but absent in others. As expected, the authors find that in municipalities with intensive coverage from local newspapers, local politicians do feel a stronger media pressure. However, when it comes to budgetary decisions, almost no observable effects of media pressure are found, either generally or in favourable political, economic or institutional settings.     

State regulations and the availability of child-care services

Most state regulations do not adversely affect the availability of regulated day-care services. However, regulations differ in their costliness, intrusiveness, and enforceability. Costly regulations may reduce the number of group day-care centers, and intrusive regulations may reduce the number of family day-care homes. Unenforceable regulations have no apparent effects. In some instances, regulators face trade-offs between quality and availability. However, requirements for provider training and limitations on group size do not involve such trade-offs. More broadly, improvements in the regulatory process may result in quality gains without reductions in availability.     

Professional Cities: Accredited Agencies,Government Structure,and Rational Choice

Accreditation, long used to signal quality among hospitals and universities, has been available to police, fire, and public works departments since the late 1980s. For public service departments, accreditation is a voluntary process that demands significant organizational resources without a guaranteed outcome. Why would city officials devote scarce resources to such an endeavor? Two explanations are examined. First, accreditation may be a rational response to a history of trouble or the potential for future crisis. Second, municipalities may use accreditation to build a reputation for professional administration of public services. The authors use Poisson regression to test these explanations on a new data set of midsize cities .     

Who ‘marries’ whom? The influence of societal connectedness,economic and political homogeneity,and population size on jurisdictional consolidations

For decades, political scientists have been asking how political jurisdictions are formed and reshaped. Nevertheless, studies of local government jurisdictional formation are few and often plagued with endogeneity since the formation of jurisdictions cannot be separated from sorting effects. In this article, the unique case of the Danish structural reform is utilised to overcome endogeneity due to migration‐related sorting by studying patterns of municipal amalgamations. In the recent Danish reform, 239 of 271 municipal entities were forced to amalgamate simultaneously, while who actually amalgamated with whom was left entirely to negotiations between the respective municipalities. Applying logistical regression to a dataset where the unit of analysis is dyads of municipalities allows the construction of a relational model for estimating the effect of different political and societal variables on the likelihood of amalgamation. Societal connectedness, population size and geography are important predictors of amalgamation patterns, while political and economic homogeneity between municipalities does not appear to matter much.     

How is Political Influence Redistributed in Times of Fiscal Austerity?

The distribution of political influence changes in times of fiscal austerity. Decision makers generally find themselves with more influence when the economy gets tighter, probably because more tough decisions must be made. In line with expectations based on the asymmetrical distribution of interests between budget guardians and advocates, however, some evidence can be found that the relative political influence shifts in the direction of the guardians when austerity becomes severe. These findings are based on a dataset consisting of a repeated cross‐sectional survey of the perception of political influence among local councillors in Denmark, combined with register data on austerity in the Danish municipalities. By moving the analytical level down to the subnational level, a contribution to the discussion on how austerity affects political influence can be made. Thus, it is not merely a practical saying that crisis opens for new political opportunities; it is now also a research agenda to investigate how this unfolds in different institutional settings.     

Municipal Amalgamations and Common Pool Problems: The Danish Local Government Reform in 2007

Amalgamating municipalities carries risks in terms of public expenditure control. The tax base of the new amalgamated municipality represents a common pool resource. The incentive is to exploit it – that is, to spend before closing time. This article investigates last-minute spending by Danish municipalities before the local government reform in 2007 in which 271 municipalities were reduced to 98. It shows that local councillors exploited this situation to finance local projects before closing time. The article thus demonstrates the occurrence of common pool problems in amalgamation situations. However, it also shows that it is the availability of a common pool that matters, not its size.     

Documentation Requirements,Intrinsic Motivation,and Worker Absence

ABSTRACT

Command systems are widely used to monitor public service provision, but little is known about unintended effects on individual workers’ motivation and work effort. Using insights from motivation crowding theory, we estimate a SEM model that captures how Danish childcare assistants and social/healthcare assistants perceive documentation requirements. We analyze how this perception relates to intrinsic motivation measured in a survey and sickness absence as reported in administrative registers, and find that individuals who perceive documentation requirements as controlling have lower intrinsic motivation and higher sickness absence. The association is statistically significant, but very small in substantive terms. The result is nevertheless consistent with the expectation in motivation crowding theory and contributes to the literature by including a new, reliable behavioral variable—sickness absence—and by drawing attention to possible downsides of command-and-control. Even though command systems can also have positive disciplining effects, knowledge about potential drawbacks is important for public managers.     

Networked Coproduction of Public Services in Virtual Communities: From a Government‐Centric to a Community Approach to Public Service Support

Research on and practical attention for the coproduction of public services is increasing. Coproduction is seen as a way to strengthen the quality and legitimacy of public service and reduce costs. Scholarship on coproduction of public services repeatedly ignores the role of the new media. This is surprising since many proponents highlight its potential for changing traditional, government‐centric approaches to delivering public services. This article shows that digital communities form an important addition to the government‐centric form of public service provision since they foster both an exchange of experiential information and social‐emotional support.