New public management and the rule of economic incentives: Australian welfare-to-work from job market signalling perspective

Mark Considine · Phuc Nguyen · Siobhán O’Sullivan

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Public Policy and Administration Research Social Policy and Reform Studies Employment, Labor, and Gender Studies

Abstract

Australia’s welfare-to-work system has undergone radical changes since the 1990s, with service delivery fully privatized in 2003 and incentives of various kinds introduced to underpin jobseeker and employment consultant activation. Informed by New Public Management (NPM), the reforms are intended to improve effectiveness and efficiency by addressing the problems of information asymmetry at different levels of the system. However, operationalizing NPM principles generated technical and regulatory challenges, and in this case, the incentive framework undermines some of the reform’s basic assumptions. This can trigger jobseekers’ and consultants’ rational decision-making behaviours which run contrary to programme expectations, hence generating suboptimal performance.

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References

1976Theory of the firm: Managerial behavior, agency costs and ownership structure 1973Job Market Signaling 1991A PUBLIC MANAGEMENT FOR ALL SEASONS?1985The economic institutions of capitalism firms, markets, relational contracting 1967Inside Bureaucracy 2003Motivation, Agency, and Public Policy 2003Motivation, Agency, and Public Policy: Of Knights and Knaves, Pawns and Queens 2012New Public Management and Citizens' Perceptions of Local Service Efficiency, Responsiveness, Equity and Effectiveness

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