Societies and Markets: Policy Reform, Solidarity, and Social Welfare

During the past two decades or so, many countries embarked on large-scale policy reforms, usually inspired by the New Public Management movement, and often accompanied by decentralization of formal decision making authority to the local or regional level. The declared objective of these large-scale institutional re-arrangements is to improve the living conditions and well-being of the greatest possible number of their citizens. Through injecting “market principles", these new governance structures are supposed to increase the effectiveness and efficiency of public service delivery, increase accountability of its leaders, and reduce socio-economic inequalities in key domains like health, education, and the labor market. To what degree and under which conditions do these massive changes in the formal institutional structures indeed succeed in achieving these objectives? How can such successes or failures be explained by the interplay of these formal changes with changes in societies’ informal fabric, its social capital and solidarity?

Building on different aspects of the social rationality framework, four externally funded PhD-projects under my supervision translate these overarching questions into more specific empirical research problems. A recently completed project investigated to what degree new public management reforms triggered Dutch public organizations to resemble private firms. Three of these projects are ongoing. They focus on how two waves of decentralization in Indonesia since 2001 affected (a) the link between informal networks and corruption of public leaders; (b) the link between community social capital and access to primary education; (c) the link between inter-organizational cooperation and performance of primary health care centers.