Public Finance,Governance, and Cash Transfers in Alleviating Poverty and Inequality in Chile

As the Chilean government seeks to reduce poverty and inequality through cash transfers to poor households, local governments are responsible for both identifying the poor and allocating transfers. Until recently, however, evaluating the effectiveness of local governments in enacting these policies has been restricted by data limitations. This paper builds on recent evidence that cash transfers have highly variable impacts on poverty and inequality at the county level. In particular, we explore how local public finance and the strength of the governing mandate influence the efficiency of cash transfers. With a richly specified model, we find that public spending on goods and services, the fraction of available subsidies claimed by the local government, and the share of county land that is zoned for industrial purposes are all correlated with considerable reductions in poverty and inequality. In addition, the strength of the governing mandate weakly influences the efficiency of transfers in reducing poverty, but not inequality. These results demonstrate that a better understanding of such institutions can lead to more efficient targeting for social programs.     

ON IRON CAGES AND SUBOPTIMAL CHOICES: AN EXPERIMENTAL TEST OF THE MICRO-FOUNDATIONS OF ISOMORPHISM IN THE PUBLIC SECTOR

This study integrates experimental and qualitative data from a sample of public employees to investigate the micro-foundations of the isomorphic pressures that may lead to suboptimal decision making in the context of public administration. When asked to choose between two equally performing systems, subjects in our sample were inclined to favor the alternative that was encouraged by either a coercive, a mimetic, or a normative pressure. Participants tended to give in to isomorphic pressures, even when informed that the encouraged option was inferior. However, letting subjects autonomously infer the inferiority of the encouraged option from numerical data—rather than through an explicit textual prompt—proved effective in neutralizing the risk of sub-optimal decisions under isomorphic pressures. A consequent qualitative inquiry revealed that trust in the recommending institution or group, speculation about alternative performance dimensions, and compatibility with existing standards were the main drivers of suboptimal decision making.     

THE ENTERPRISE FORMULA,NEW PUBLIC MANAGEMENT AND THE ITALIAN HEALTH CARE SYSTEM: REMEDY OR CONTAGION?

Health care services represent an extraordinary experimental ground for introducing wider political and institutional transformations of the state. The adoption of entrepreneurialism into European health care systems has strengthened technocratic decision making over traditional mechanisms of political control. In Italy, in the midst of a severe legitimacy crisis affecting the administrative and political systems at the beginning of the 1990s, New Public Management ideas seemed ‘the’ remedy against the pathological politicization of distributive politics. Much hope has been placed since in a new and ascending group of general managers, entrusted with the ambitious mission of running health care services more efficiently and with the unenviable expectation of resuscitating public trust in welfare institutions. By analysing the 1992 Amato government’s landmark health care reform in its substantive changes, this paper explores the last decade’s main reform trajectories of Italian health care reforms that irreversibly transformed its institutional arrangements and organizational structure, namely the enterprise formula and the regionalization of the health care sector. The paper suggests that the political turmoil of 1992–94 served as catalyst for radical policy change and argues that the single most important explanation for the enactment of New Public Management‐type reforms rests in a new executive reinterpretation of its legislative prerogatives and function.