European Group for Public Administration location:Speyer date:10-12 September 2014
The introduction of market-type mechanisms into the public sector has been a feature of many of the reforms associated with the New Public Management. In seeking to benefit from the competitive pressures exerted through marketization, governments have hoped to gain improvements in public service efficiency in particular. Yet, concerns remain about the effects of marketization on how equitably public services are provided, with many suggesting that there is an ineluctable trade-off between efficiency and equity that goes hand-in-hand with market-orientated reforms. In this paper, we review the existing evidence on what is known about the relationship between the introduction of market-type mechanisms in the European public sector and the efficiency and equity of service provision. Our analysis reveals that although market-type mechanisms sometimes result in worse service equity, there is only weak evidence of a trade-off between efficiency and equity. We go on to argue that the design and implementation of market-based reforms may be a more important determinant of their success, rather than their supposed intrinsic characteristics.