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AbstractPublic sector outsourcing, in the form of private production of tax-financed services, is on the increase with economic and social consequences for consumers, taxpayers, and employees. The development has given rise to so-called quasi-markets with choice and competition between public, for-profit, and non-profit providers. By introducing the main characteristics of quasi-markets with a focus on prices, this article provides background perspectives. It sets the stage for the other six articles on public sector outsourcing in this special issue of the journal. (JEL codes: D23, H11, H44, L33).

Using data from the Swedish Election Studies between 1985 and 1994 supplemented with time series on inflation and unemployment, I compare the impact of macro- and microeconomic variables on the individual vote. The principal finding is that macroeconomic variables influence the vote a bit more than microeconomic variables do. In consequence, both self-interest and public interest appear to be important explanations of economic voting in Sweden. Macroeconomic variables have, however, been much more influential in determining election outcomes. Since previous studies of economic voting have used cross-sectional data only, it is also worth noting that panel estimates indicate a much greater impact of macroeconomic variables on the individual vote than cross-sectional estimates do.

This book discusses Sweden's extensive experience of privatizing welfare services. The book presents several lessons from the Swedish experience that should be of interest to all democracies seeking to benefit from introducing market elements to health care, education, and elderly care.

This text discusses Sweden's extensive experience of privatizing welfare services. It presents several lessons from the Swedish experience that should be of interest to all democracies seeking to benefit from introducing market elements to health care, education, and elderly care.

In 2009, Sweden launched a freedom-of-choice reform that gave municipalities the option to introduce standardized quasi-markets in social services. The reform was initially popular to adopt in home care until the share of adopting municipalities leveled out just above 50 percent. In recent years, the trend has reversed, and several municipalities have abolished their choice system. Compared with municipalities with choice systems, the abolishing municipalities are more rural with fewer inhabitants. A fixed-effects regression suggests that decreases in the market share of private providers, political shifts towards the left, and increasing costs are related to the abolition of choice systems.

Given the intensive and ideologically charged debate over the use of private contractors for publicly funded services, it is somewhat surprising that many social scientists have preferred to explain government outsourcing by the pursuit of economic efficiency. Starting out from different theories, we investigate political explanations of government outsourcing using a Swedish data set in which outsourcing varies between municipalities and over time, as well as between services. Our identification strategy focuses on two services with similar contracting problems and local market conditions: preschools and primary schools. We study a period in which Swedish municipalities had full discretion in the provision of preschools, while their influence on the private provision of primary education was limited by a national voucher system. The comparison of preschools with primary schools in a difference-in-differences model suggests that the political color of the ruling majority influences outsourcing, which is consistent with the Citizen Candidate model of representative democracy.

Given the intensive and ideologically charged debate over the use of private contractors for publicly funded services, it is somewhat surprising that many social scientists have preferred to explain government outsourcing by the pursuit of economic efficiency. Starting out from different theories, we investigate political explanations of government outsourcing using a Swedish data set in which outsourcing varies between municipalities and over time, as well as between services. Our identification strategy focuses on two services with similar contracting problems and local market conditions: preschools and primary schools. We study a period in which Swedish municipalities had full discretion in the provision of preschools, while their influence on the private provision of primary education was limited by a national voucher system. The comparison of preschools with primary schools in a difference-in-differences model suggests that the political color of the ruling majority influences outsourcing, which is consistent with the Citizen Candidate model of representative democracy. [Copyright Elsevier B.V.]

Given the intensive and ideologically charged debate over the use of private contractors for publicly funded services, it is somewhat surprising that many social scientists have preferred to explain government outsourcing by the pursuit of economic efficiency. Starting out from different theories, we investigate political explanations of government outsourcing using a Swedish data set in which outsourcing varies between municipalities and over time, as well as between services. Our identification strategy focuses on two services with similar contracting problems and local market conditions: preschools and primary schools. We study a period in which Swedish municipalities had full discretion in the provision of preschools, while their influence on the private provision of primary education was limited by a national voucher system. The comparison of preschools with primary schools in a difference-in-differences model suggests that the political color of the ruling majority influences outsourcing, which is consistent with the Citizen Candidate model of representative democracy.