Governing Public Employment Services: New Public Management, Social Partnership and Privatization

The Great Recession that has haunted the world since 2008 has made the crucial importance of effective public employment services (PES) pain- fully apparent. Unemployment has been hovering at about 10 per cent in the European Union (EU) and the USA, long-term unemployment is on the rise almost everywhere in the Western world, and in many places youth unemployment is over 20 per cent, leaving behind entire lost generations. But even before the global financial crisis, un- and under- employment was a challenge for policy-makers and individual workers alike. For that reason, PES have long been important institutions for the operation of modern labour markets, performing tasks that range from the provision of financial assistance to workers without jobs to acting as critical players in matching vacancies with jobseekers and equipping workers with the skills they need to succeed in rapidly changing labour markets. In many countries, they also function as the ‘employer of last resort’ through the organization of direct job creation schemes, the facilitation of short-time work schemes (Kurzarbeit) and/or the provision of employment subsidies to firms willing to train or hire disadvantaged workers. Given their pivotal role, it is hardly surprising that PES have been exposed to massive modernization efforts in recent decades, frequently resulting in complete restructuring. Most of these reforms have been driven by a strong belief in the value of ‘new public management’ (NPM) techniques that revolve around introducing new systems of performance, quality and case management, while separating purchasers from service providers (Weishaupt, 2010a).