Institutions, distributional concerns, and public sector reform

As in other Western 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, short-term 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.