This book addresses the transformations in welfare that have unfolded internationally since the 1990s, and more recently in Ireland. Specifically, the growing emphasis on reforming benefits and services to accelerate the targeting of claimants for ‘activation’. Wacquant characterises this in terms of a ‘shift from protective welfare, granted categorically as a matter of right, to corrective welfare’ (2012: 72) conditioned on the fulfilment of conduct conditions.
What Wacquant terms ‘corrective welfare’, others term ‘workfare’ (Peck, 2001; Dingeldey, 2007; Brodkin, 2013b) – to emphasise the regulatory and ‘work-first’ orientation of contemporary activation (or welfare-to-work) policies. Benefits that once afforded a degree of protection from the vicissitudes of the market, and which partially de-commodified labour by enabling people to survive financially without employment, have increasingly been re-purposed as levers for recommodifying non-employed labour (Raffass, 2017). Labour market integration and the enforcement of citizens’ dependency on (frequently low-paid) employment have eclipsed income protection as welfare’s governing logic – symbolised in the redesignation of unemployment benefits as jobseeker allowances in several countries (Marston, 2006).
This book scrutinises the intersection between these two distinct but interrelated ‘tracks’ (Brodkin, 2013b: 11) of welfare reform; what, in shorthand terms, can be described as the ‘activation turn’ (Bonoli, 2010) in social policy and the governance turn towards marketisation in public administration. It sets out to consider not only why these two reform tracks have unfolded together but, more importantly, how they are mutually related in terms of marketisation propelling the policy turn towards a more conditional workfare model:
Is it coincidence that as countries have looked to reconfigure their welfare systems to ‘activate’ claimants, they have
frequently done so by transferring responsibility for service delivery towards private providers competing in quasi-markets? How does the delivery of employment services change in substance when enacted under conditions of market governance?
A street-level perspective
The book approaches these questions from the vantage point of street-level bureaucracy research, an approach to studying policy that was pioneered by Lipsky (2010) in the 1980s. For Lipsky, street-level bureaucracies constitute the government agencies that directly deliver programmes to citizens in a broad range of areas (social policy, healthcare, education, policing) and ‘whose workers interact with and have wide discretion over the dispensation of benefits or the allocation of public sanctions’ (2010: ix). It is this ‘citizen-facing’ role that separates them from other public organisations, although nowadays non-government organisations often perform this role. For this reason, contemporary scholarship tends to talk of street-level organisations rather than bureaucracies since policies ‘may be delivered through a variety of organisational forms’ (Brodkin, 2015: 5).
Street-level research begins from the perspective that politics and administration are inseparable. The ‘being’ of policies depends on how they are enacted by street-level organisations and the frontline staff working within them. This is an unsettling idea for public administration, which has a long history of trying to separate the partisan world of policymaking from the ‘professional’ field of policy implementation (Moynihan and Soss, 2014). But there are at least two reasons why studying policy at the street-level delivery is critical. First, most people encounter policy in embodied form through their experiences with specific caseworkers, clerical officers, and other agents of the state. So, to understand the impact of
Policies are rarely fully determinate about what should be done in each case. So, frontline workers must use their judgement to determine how general rules can be fitted to the nuances of real lives. Hence why street-level workers are often considered ‘de facto policymakers’ (van Berkel, 2013: 88; Brodkin, 2013a: 23) who continue the process of policymaking ‘while policies are delivered’ (Caswell et al, 2017: 2). This exercise of discretion is rarely uniform, but neither is it ad hoc. It is structured by the organisational routines, management, and performance regimes surrounding frontline work, as well as the kinds of professional identities, personal experiences, and worldviews that workers bring to their jobs. The challenge for students of street-level bureaucracy is to understand how these factors shape discretion ‘and what that means for the production of policy’ (Brodkin, 2015: 5), and ultimately for the citizen or service-user. This requires making sense of what Brodkin terms ‘the missing middle’ of policy analysis: ‘the opaque spaces between formal policy provisions and social outcomes in which the essential work of the welfare state and its policies takes place’ (2013c: 271–272).
Recognising this brings into view why governance reforms matter to determining the substance of activation. In reconfiguring how and by whom policies are delivered, governance reforms carry the potential to indirectly change what policies are produced. If politics is about ‘who gets what, when, and how’ (Lasswell, 1936), and governance
Why Ireland?
To date, policy delivery in Ireland has rarely been a subject of street-level research. This book hopes to break new ground in this regard, but it is also motivated by the fact that the history of post-crisis welfare reform in Ireland offers an especially pertinent case study for examining the intersections between the ‘activation turn’ in social policy and the ‘marketisation turn’ in welfare administration. As detailed in Chapter Two, the country was historically an outlier among the group of liberal welfare states both for the relative passivity of its welfare state, as well as its weak commitment to New Public Management (NPM) style reforms. It was frequently chastised as a ‘laggard’ (Köppe and MacCarthaigh, 2019: 138) that was dragging its heels on activation reform. The Director of the OECD’s Labour and Social Affairs division famously likened Ireland’s pre-crisis activation model to ‘the emperor who had no clothes’ (Martin, 2015: 9) insofar as there was almost no use of sanctions and little implementation of conditionality.
All this has now changed, with social policy in Ireland widely argued to have taken ‘an increasingly workfarist turn’ (Gaffney and Millar, 2020: 69) since 2010; albeit one that has yet to reach the punitive heights seen in Britain or Australia. Yet, an unusual feature of how Ireland reformed its welfare state during this period was the government’s ‘pluri-governance’ (McGann, 2022b: 942) approach to commissioning employment services for the long-term unemployed. Market governance was introduced on top of pre-existing corporatist structures and a long tradition of mixed welfare delivery through church and community organisations.
From 2015 until 2022, Ireland evolved an almost unique ‘mixed economy’ of activation that afforded a rare opportunity
Ireland’s mixed economy of activation was essentially a natural policy experiment in the use of different governance modes to steer frontline delivery. This book draws on original comparative research into this mixed economy – survey research and in-depth interviews with frontline JobPath and LES staff, qualitative research with service-users, and interviews with key officials – to assess the extent to which the use of market governance instruments changes the substance of policy delivery. Specifically, whether (and how) the procurement of employment services via market governance instruments spills into the delivery of a more demanding, workfarist model of activation at the street-level. It also examines the internal changes wrought by marketisation in how the performance of street-level workers is managed, monitored, and measured – and the effects on workers’ professional identities – and how these reshape agency in policy delivery. The study is described in Chapter Three while the reforms that have unfolded since 2010 are reviewed in Chapter Two. First, it is necessary to elaborate on the broader international context and contours
The ‘activation turn’ in social policy
The past 30 years, Considine and Lewis argue, have seen a major ‘sea change’ (2010: 385) in how welfare is enacted. A key part of this has been the coupling of income supports with ‘supply-side employability interventions’ (Whitworth and Carter, 2020: 845) aimed at moving claimants into work. This so-called ‘activation turn’ (Bonoli, 2010: 435) has been heavily championed by the OECD, although there are important variants in how it has been implemented. One common typology is to differentiate the ‘enabling’ or ‘human capital development’ elements of activation (education and retraining) from the ‘regulatory/demanding’ or ‘workfarist’ elements including the use of benefit reductions, time limits on payments, and other negative incentives to push people into work (Dingeldey, 2007; Lindsay et al, 2007; Raffass, 2017; Whelan et al, 2021).
Human capital versus workfare models of activation
In practice, almost all labour market policies combine ‘a mix of demanding and enabling elements’ (Sadeghi and Fekjær, 2018: 78). Countries that prioritise building employability through upskilling will often make benefits conditional on participation in training. Nonetheless, in general terms, two distinct styles of activation can be coherently distinguished: a human capital model and a workfare model. While both aim at citizens achieving economic self-sufficiency through employment, they differ in their problem diagnosis and recommended course of treatment. They are also not the only activation models. Other alternatives include ‘career-first’ (Fuertes et al, 2021), ‘work-life balance’ (Whelan et al, 2021), and even ‘life-first’ (Dean, 2003) models. However, these remain little more than conceptual alternatives which have seldom been implemented.
Workfare models, by contrast, try to catalyse transitions from welfare-to-work using policy instruments with ‘more perceptibly hard edges’ (Brodkin, 2013b: 6). Examples include the imposition of mandatory work obligations in the form of ‘Work-for-the-Dole’ programmes. Indeed, workfare is sometimes equated precisely with mandatory work programmes (Lødemel and Moreira, 2014: 9). However, most understandings adopt a wider definition of workfare as an activation model that focuses on combining tighter eligibility conditions for receiving payments with more onerous behavioural conditions backed by sanctions for claimants who breach obligations to seek and accept work (Bonoli, 2010). Workfare models will include some enabling measures (job-search training) to assist people in their search for work. However, the emphasis of even these enabling measures is on prioritising ‘perpetual job-search motion’ (Wright et al,
In historical terms, the workfare model is associated with liberal welfare regimes. It originated in the United States (US) in the 1980s, spreading to Australia and the United Kingdom (UK) in the mid-1990s (Lødemel and Gubrium, 2014; O’Sullivan et al, 2021). But it would be a mistake to associate it exclusively with liberal welfare regimes. Indeed, since the early 2000s, there has been a discernible shift towards workfarist models across OECD countries as ‘conditions and sanctions for the unemployed have overall become stricter’ (Knotz, 2018: 92). It is a shift that has accelerated since the financial crisis, as more countries have reoriented their policies toward ‘promoting the demanding elements of activation’ (Seikel and Spannagel, 2018: 247). This has especially been the case in Britain, where the escalation in the use of welfare conditionality since 2010 – in terms of the severity of penalties and the onerousness of conduct conditions – has been likened to a brutalising regime of ‘violent proletarianisation’ (Grover, 2019). But it has also been the case in European countries previously committed to the human capital approach such as the Netherlands, Sweden, and Denmark (de La Porte and Jacobsson, 2012; Umney et al, 2018; Bekker and Mailand, 2019). To this extent, the workfare model is increasingly regarded as the ‘standard welfare orthodoxy at the heart of international welfare systems’ (Whitworth and Carter, 2020: 845).
Besides changes in payment rates, sanctions, and eligibility conditions, the institutional structures through which activation policies are implemented have also changed in important ways. As countries have reoriented their activation policies towards a workfarist blend of job-search services and sanctions, it has become rarer for programmes to be delivered by public organisations or to be coordinated through traditional forms of bureaucratic accountability. Employment services are instead increasingly coordinated through new menus ‘of incentives and regulatory devices’ (Considine et al, 2015: 22) and enacted by a wider range of actors from across the public, private, and community sectors.
There are several strands to these governance shifts, which can be loosely grouped under the umbrella of ‘NPM in activation’ (Ehrler, 2012: 328). One helpful way of approaching NPM is as a blend between two related governance modes: ‘corporate’ and ‘market’ governance (Considine and Lewis, 2003). The former emphasises ‘management by objectives’ and steering organisational and individual behaviour through performance measurement and targets. Its core instruments are the setting of organisational goals and employee targets, developing systems for measuring performance, and incentivising goal-achievement through performance bonuses. Market governance is related to corporate governance in that organisations in public service markets will often use ‘managerialisation’ (Larsen and Wright, 2014: 457) to internally manage their staff. Nevertheless, what differentiates market governance is its prioritisation of ‘management by competition’. Where corporate governance tries to transform the public sector by making it more like private enterprise, market governance seeks to abolish monopolistic state provision through creating markets for public services in which various for-profit, not-for-profit, and even public organisations compete. This is initially to win
While corporate governance reforms are an important part of the reform story, it is the rise of quasi-marketisation that arguably constitutes the most significant of the governance reforms facing welfare states today (Greer et al, 2017; Jantz et al, 2018). It entails boundary setting reform that not only shifts the role of government from a provider of services to a purchaser of outcomes. It also profoundly reshapes the social divisions of welfare between the market, state, and community sectors.
What is driving this project of marketisation? That is a key question returned to throughout this book. Governments may have both pragmatic as well as ideological reasons for introducing quasi-markets. For instance, the state’s internal capacity to deliver employment services may quickly become overwhelmed by a surge in unemployment owing to economic recession. Under such circumstances, outsourcing may afford governments a way of bolstering capacity while avoiding long-term cost commitments (Langenbucher and Vodopivec, 2022). This was an important consideration behind the Irish Government’s commissioning of JobPath. But it does not fully explain why contracting out increasingly involves allocating services through forms of competitive tendering and outcomes-based contracting. That is, in addition to bringing on board external employment services capacity, why governments increasingly choose to do so through processes of competitive bidding and results-based payment models. This predilection for using market governance instruments in service commissioning stems rather from a normative belief in the utility of markets to promote ‘a higher quality of service and a more efficient allocation of resources’ (Le Grand, 2011: 84).
Quasi-markets in employment services
At this point, it is pertinent to elaborate on why public services markets are considered quasi-markets, and the diversity of forms
Not all providers in quasi-markets are privately owned or driven by profit-maximisation. Many are purportedly not-for-profit organisations with a social mission, although what differentiates not-for-profit from for-profit providers is not always clear in practice (Considine et al, 2020b; O’Sullivan et al, 2021). There are also examples of quasi-markets with publicly owned providers, such as Australia’s Job Network which was introduced in 1998 when the Howard government put the Commonwealth Employment Service into competition with private contractors. This started a slippery slope towards full privatisation in 2003, when the public provider lost all its contracts. So, while ‘marketisation is not synonymous with privatisation’ (Van Berkel et al, 2012: 275) it can certainly clear the way for a corporate capture of public services (Bennett, 2017). Much will depend on the extent to which state-owned services are exposed to competition and what steering instruments are used.
Key concerns are the degree of price-bidding permitted during tendering and the extent to which funding models are tilted towards Payment-by-Results rather than fees-for-service. Where bidders are encouraged to compete on price – bidding down the value of the fees and outcomes payments they stand to earn – this can skew quasi-markets in favour of larger firms who can use their economies of scale to outbid competitors. Likewise, if the funding model is oriented towards Payment-by-Results, this can similarly favour ‘bigger, multi-national for-profit actors’ (Langenbucher and Vodopivec, 2022: 11), as has been the recent experience in Australia and the UK (Considine et al, 2020b). Outcomes (or results)-based payment models essentially transfer the financial risk of service delivery onto providers. Large, for-profit firms can borrow capital in
The second key difference between quasi-markets and conventional markets is that the ultimate consumers (claimants) rarely purchase services directly. In conventional markets, consumers reign sovereign to the extent that they enjoy the right to take their business elsewhere should they be dissatisfied with the service on offer. This consumer choice is a key dynamic that drives the purported efficiency of the market as an optimal means of allocating resources. Early theorisations of quasi-markets also celebrated the possibilities of unlocking consumer choice to increase service responsiveness on the grounds that: ‘If users who are receiving a poor-quality service from particular providers can go elsewhere … [and] the money follows the choice, then the providers concerned have a strong incentive to deliver a higher quality of service; for, if they do not, they will go out of business’ (Le Grand, 2011: 85).
However, this kind of consumer purchasing power is seldom realised in welfare-to-work markets. Claimants rarely have the choice to ‘go elsewhere’. More often, they are treated as passive clients that the state simply directs ‘to the provision it has bought’ (Wiggan, 2015a: 117). There are exceptions. Two notable examples are Germany and the Netherlands, both of which have experimented with voucher schemes whereby jobseekers are given tokens to purchase labour market reintegration services from their preferred provider. It is still the state that ultimately makes the purchase, but the use of vouchers does give jobseekers some say over which services are bought. However, experience to date suggests that consumer choice is often only weakly enacted even under such conditions. One reason is that claimants often
The final key difference between quasi-markets and conventional markets is the potential for purchasing power to be concentrated in a ‘monopsony’ (Struyven and Steurs, 2005: 215) purchaser. This is where a single government agency acts as the sole purchaser within the market, as has been the case in Australia for 25 years and likewise in Ireland, where all externally delivered services are centrally contracted by a single unit of the Department of Social Protection (DSP). This consolidation of purchasing power is problematic for maintaining a competitive market structure which, Struyven and Steurs argue, depends not only a diversity of providers ‘but also a sufficient number of purchasers’ (2005: 215).
In a fully competitive market, the quantity of services produced, and at what price, should be a function of the overall balance between supply and demand. In quasi-markets, however, the total level of demand for activation services is fixed by the government. While this doesn’t give it complete control over price – it must offer prices that providers are willing to bid for – it does give it far greater leverage to dictate contract terms than in a competitive market. Again, there are exceptions to this rule of monopsony purchasing such as the Netherlands and Denmark, where responsibility for administering social assistance and coordinating activation services lies with municipal governments. Providers therefore have a wider range of purchasers that they can transact with, giving them potentially greater leverage to demand higher prices. Conversely, in quasi-markets with a monopsony purchaser, established providers that have already made sunken investments to deliver previous contracts can become
Varieties of quasi-markets
Beyond consumer choice being more restricted in quasi-markets compared with conventional markets, it is also important to recognise that quasi-markets are ‘not one thing’ (Meagher and Goodwin, 2015: 3). They vary significantly between (and within) countries in terms of whether purchasing power is centrally consolidated in a single purchaser, the degree to which they embed privatisation, and the extent to which they enable user choice. This has led to a growing awareness that quasi-markets differ as much as they converge, and that their relationship to ‘market governance’ is variable (Gingrich, 2011; Van Berkel et al, 2012; Wiggan, 2015a).
One way of unpacking this variation is to distinguish between waves of quasi-marketisation. This helps to capture where and when quasi-markets first emerged, and how quickly they travelled elsewhere. Taking this approach, we can distinguish pioneering countries leading the turn towards quasi-marketisation from early adopters and late comers. Pioneering countries include:
the US, where quasi-markets took root during the late 1980s (Finn, 2010);
Australia, which began to outsource activation services for the long-term unemployed in 1994 (Considine et al, 2015); and
the UK, which turned to quasi-markets to implement the Blair government’s New Deal programmes in the late 1990s (Larsen and Wright, 2014; Jantz and Klenk, 2015).
The Netherlands is also sometimes considered as a pioneering reformer (see Finn, 2010), although a fully competitive market wasn’t introduced in the Netherlands until the early 2000s (van Berkel and van der Aa, 2005). This was when
A third group of countries might be classified as ‘late comers’ in that they embraced quasi-markets in employment services only well after they had taken root elsewhere. Ireland is an exemplar ‘late comer’ having turned to competitive tendering and outcomes-based contracting in 2015.
Table 1.1 summarises the spread of quasi-markets over time by pioneering countries, early adopters, and late comers. This is by no means an exhaustive list, and there are many countries not included (France, Sweden, Switzerland) which have also pursued market governance reforms of their employment services. It is intended merely as an indicative demonstration
Waves of quasi-marketisation
| Chronological stages | Examples |
|---|---|
| Pioneers | US (1980s), Australia (1994), UK (1997) |
| Early adopters | Netherlands (2001), Denmark (2002), Germany (2003) |
| Late comers | Ireland (2015), Finland (2015–2019) |
Beyond differences in time, other typologies focus on how quasi-markets differ in terms of the extent to which they embed market competition (producer-driven) and user choice (consumer-driven) as key steering mechanisms
‘Committed marketisers’ revolve around what Gingrich (2011) would classify as ‘producer-driven’ quasi-markets. Namely, quasi-markets in which decisions about the targeting and content of services lie mainly with providers rather than being shaped by the consumption patterns of service-users or the regulatory decisions of the state. They are quasi-markets in which service-users have few exit options and public managers take a ‘hands-off’ approach to regulation, believing that that ‘producers will have more room to innovate where there is less state interference’ (Gingrich, 2011: 17). Conversely, in ‘slow marketisers’ the overall level of outsourcing is low and many if not most services continue to be publicly administered through large state-owned agencies subject to hierarchical control. While quasi-markets may be a feature of these countries’ activation systems, opportunities for new players to enter the market are rare and are tightly controlled by accreditation requirements (Jantz and Klenk, 2015).
Problems of ‘creaming’ and ‘parking’ are far from exclusive to quasi-markets. Facing limited resources, high caseloads, and pressures to meet targets, frontline staff in public agencies are also liable to engage in similar frontline ‘selection practices’ (van Berkel and Knies, 2016: 64). Nonetheless, several aspects of quasi-market provision including the for-profit motive of many providers and the contingency of providers’ payments on achieving employment outcomes make guarding against
The nature of quasi-markets in modernising and slow marketising countries is more reflective of a ‘state-managed’ than ‘producer-driven’ market. Public managers use market instruments ‘to set incentives for cost-efficiency’ but the state intrudes in the market to set clear parameters on ‘“meat and potatoes” issues’ (Gingrich, 2011: 13) like staffing and caseload sizes. These will be tightly specified in contracts and enforced through close auditing of providers and issuing of financial penalties for breaches of minimum standards. State-driven quasi-markets thus blend market governance with strong forms of procedural accountability anchored in ‘a legalistic structure with clear standards and tight control’ (Gingrich, 2011: 14). They are less concerned with catalysing innovation than with harnessing the market to achieve cost savings. This is in sharp contrast to the degree of power ceded to market actors in ‘producer-driven’ markets, which involve the purest form of market governance and most radical change to the role of the state in welfare administration.
Towards ‘double activation’
Clearly, the recent history of welfare reform is not just about the push to convert claimants into active jobseekers through behavioural conditions and sanctions. Core to the contemporary workfare project is a parallel agenda of transforming how services are produced by street-level organisations; partly through opening public services to competition but also through using financial incentives to motivate providers to deliver services more efficiently and in different ways. This second reform track has become ‘closely intertwined’ (Brodkin, 2013b: 11) with workfare reforms, although it has varied between countries in pace and form.
As in the case of workfare policies, Anglophone liberal countries pioneered quasi-marketisation. Several European countries shortly followed as they too sought to dilute their earlier emphasis on human capital development in favour of a more workfarist model. Different countries organised their quasi-markets in different ways, varying the balance of power between the state, the market, and service-users. Nonetheless, in all cases, the project of welfare reform can be understood as being targeted ‘at least as much at welfare-to-work providers and their caseworkers as at unemployed claimants’ (Whitworth and Carter, 2014: 106). Put differently, it constitutes a project of
The book proceeds as follows. Chapter Two builds on the analysis of the twin tacks of welfare reform to unpack how the post-crisis reform of the Irish welfare state proceeded through a blend of workfarist social policy reforms coupled with market governance (among other) administrative reforms of employment services institutions. Chapter Three then introduces the Governing Activation in Ireland (GAII) study underlying this book in the context of elaborating the concept of ‘double activation’ and developing an account of the conceptual linkages between workfarist activation and quasi-marketisation. It is argued that both are animated by a normative commitment to the commodification of non-employed labour and a shared theory of agency that assumes neither welfare nor administrative subjects can be trusted to work reliably unless externally incentivised to do so.
Chapter Four then examines differences in service delivery between JobPath and LES organisations, both in terms of service-users’ experiences and frontline workers’ perspectives on the animating values and practice models shaping their
Chapter Five zooms out from the micro-level of the caseworker-client interactions to consider the organisational dynamics behind these observed practice differences. Specifically, it identifies two key mechanisms by which quasi-marketisation reshapes agency at the street-level to push policy implementation in a more workfarist direction: the politics of discretion, which refers to the disciplinary effects of targets and performance measurement on street-level choice, and the politics of professionalism, which describes how marketisation reshapes the kinds of occupational backgrounds, professional identities, and normative beliefs about unemployment that street-level workers bring to their work.
Chapter Six concludes with some reflections on what the Irish case contributes to the broader international understanding of the dynamics between workfare and quasi-marketisation. It also synthesises the findings of the previous chapters to produce a theoretical model of how the commissioning of employment services via instruments of market governance spills over into the production of workfarist policy practices at the micro-level through reshaping street-level agency via politics of professionalism and discretion.
