New Public Management Marketizers versus Weberian Modernizers? Institutional Configurations of Social Impact Bond Utilization Among 18 OECD Countries

• In Event: Funding for the common good?

Abstract

New Public Management (NPM), as an influential administrative reform movement, has been extensively studied, ranging from a normative orientation calling for the adoption of private sector management and organizational practices and objectives, to specific tools and practices aimed at improving public service efficiency. Despite its unfavourable assessment by public management scholars, NPM maintains a paradoxical relevance in public administration practice. This paper explores a current application in the emergence and persistence of the Social Impact Bond (SIB), a privately financed, pay-for-success commissioning model for public social service delivery. In a typical SIB, private investors provide upfront financing to non-profit service providers, to deliver preventive social service programs, with government only repaying investors based on the achievement of targeted outcomes, constituting a hybrid governance arrangement involving the public, nonprofit, and for-profit sectors to increase public value. As of early 2021, over $400 million has been invested in approximately 200 SIB projects worldwide.

We draw on the relevance and persistence of ‘NPM-style reforms and practices to current public sector reform programs’ but also more specifically ‘the layering effect between NPM and other reform trajectories and framing. SIBs, a recent NPM-style commissioning model, contain elements of other reform framings, widening their appeal and potential for variation in differing reform contexts. The varied and selective adoption of NPM can partially be explained as reform trajectories being shaped by the interaction of NPM ideas and ideals with differing national socio-political context and institutional specificities, including differing public management cultures and traditions, resistance from labour unions, and economic performance.

Using a fuzzy-set qualitative comparative analysis (fsQCA), we investigate what configurations of national-level contextual factors align with high and low utilization of the SIB model in a set of 18 Organization for Economic Co-operation and Development (OECD) countries. Our investigation is theoretically grounded in the comparative welfare state analysis. Specific contributing conditions include levels of income inequality, labour movement strength, financialization defined as financial sector share of GDP, intensity of social expenditure privatization, and austerity. According to our analysis, the two high-utilization configurations produce an Anglo-American model of NPM marketizers and a European model of Weberian modernizers, whereas the four low-utilization configurations include exclusively New Weberian State modernizers and maintainers, suggesting SIBs as a fertile case study of public management reform tools adapting and trajectories merging in differing national administrative cultures and contexts.

While the main objective of our study is to explain SIB emergence and look for institutional antecedents (configurations) that explain high versus low SIB uptake across a set of 18 OECD countries, we utilize the concept of layering effects of NPM and other reform trajectories to help interpret our solution configurations, providing novel paths forward for future research on this idea more generally and SIBs in particular.

References

Not available

Authors

• Jesse Hajer, University of Manitoba

• Bin Chen, Baruch College/CUNY