Can the decentralization of power in public services prevent the market failures of privatization ?

Excerpted / republished from Maria Felicita Ferraro:

“When the neo-liberal approach of “marketisation” began to spread, it was rooted on a particular critique of state-run services. They were indeed perceived as top-down, inefficient and out of touch with people’s needs, knowledge and preferences. The public service agenda of the following governments has more often than not been based on market competition and consumer choice, with the aims of reaching lower costs, increasing quality and respond better to consumers’ preferences.

As rightful as all of these aims sound, though, it doesn’t seem like they have been reached. Public services often leave very little power to citizens, in favor of experts and politicians. What did we expect, though? Competition tends to lead to fragmentation and opposition between stakeholders, it discourages partnerships and it induces private companies to prioritise shareholder-return, which contrasts with public policy priorities such as meeting social needs. And while competition has been negative on the public sector, an alternative model of commissioning would allow for a collaborative partnership between different publicly oriented institutions.

The New Economic Foundation (NEF) has hence recently argued that public services should be delivered democratically and with the help of other not-for-profit community and civil society groups. It proposed a top-down approach that could bring more power to citizens thanks to a series of steps:

The first is co-production among experts and citizens who are recipients of a service, in order to combine their knowledge.

Then there is participatory democracy, that allows service users more control over decisions, over public spending (through participaroty budgeting) and even over political decisions (an example is Iceland, who recently tried to “crowdsource” its new constitution).

One more measure to shift power is the reformation of public agencies so that they resemble the model of cooperative governance structures, by granting less hierarchical working cultures that ensure more autonomy and trust to their staff, as Newcastle has succesfully demonstrated.

Indeed, there already are positive outcomes coming from the implementation of this approach: some public agencies, across the UK and beyond, are already enjoying the benefits of co-production, seeing services designed and delivered through an equal partnership between professionals and service users.: