Neoliberal failures and the managerial takeover of governance

The history of neoliberalism is a messy attempt to turn theory into practice. Neoliberals struggled with their plans to implement flagship policies of monetarism, fiscal prudence, and public sector privatisation. Yet, inflation was still cut, welfare slashed, and the public sector ‘marketised’. Existing literature often interprets this as neoliberalism ‘failing-forward’, achieving policy goals by whatever means necessary and at great social cost. Often overlooked in this narrative is how far actually existing neoliberalism strayed from the original designs of public choice theorists and neoliberal ideologues. By examining the history of the Thatcher government's public sector reforms, we demonstrate how neoliberal plans for marketisation ran aground, forcing neoliberal governments to turn to an approach of Managed Competition that owed more to practices of postwar planning born in Cold War US than neoliberal theory. Rather than impose a market-like transformation of the public sector, Managed Competition systematically empowered top managers and turned governance into a managerial process; two developments that ran directly against core precepts of neoliberalism. The history of these early failures and adjustments provides vital insights into the politics of managerial governance in the neoliberal era.

Switzerland

This chapter offers an in-depth look at health politics and the mandatory health insurance system in Switzerland. It traces the development of the Swiss healthcare system, characterized by the strong role of the cantons and private stakeholder organizations in managing the system as well as the reliance on voluntary private insurance for most of the twentieth century. Since 1994, when a law on mandatory health insurance was adopted, the main issues in Swiss healthcare politics have been increasing costs, managed competition, the introduction of case-based payment, and healthcare governance. Switzerland’s consociational political system, with its instruments of direct democracy, federalism, and corporatist interest representation, impedes the development of consensus across the left–right divide about whether the health system should rely more on market mechanisms and individual responsibility or on state control and universal coverage.

Slovakia

This chapter offers an in-depth look at health politics and the health system in Slovakia based on compulsory social health insurance. It traces the development of the Slovak healthcare system, characterized by the shift from a social health insurance model to a Semashko model of health provision under communism. Slovak post-communist health politics has been marked by strong left–right political conflict and institutional barriers to reforms. Nevertheless, health policy in Slovakia displays a dramatic shift to a market-oriented healthcare provision based on user fees and managed competition, introduced in 2003 and 2004. Attempts to reverse market-oriented reforms were partially successful and have involved supranational and international authorities of the European Commission and of the International Court of Arbitration. As outlined in the chapter, some of the main issues facing the Slovak healthcare system have been overcapacity in the hospital sector, a malfunctioning referral system, and corruption.

The Netherlands

This chapter provides an extended look at health politics and the mandated health insurance system in the Netherlands. It traces the historical development of the Dutch healthcare system, analyzing the emergence of a bifurcated public–private system and its replacement with mandated private insurance in 2006. The Dutch case is thus notable for large-scale privatization accompanied by expanding state regulation of private actors. Dramatic shifts in the party system since the 1980s shaped reform processes as the center-left consensus in favor of social health insurance and redistributive financing was replaced by center-right consensus supporting managed competition among private insurers. Reforms adopted since 2005 have aimed to control costs without sacrificing quality, largely by strengthening managed competition and the regulation underpinning it.

Hungary

This chapter offers an in-depth look at health politics and the social health insurance-based system in Hungary. It traces the development of the Hungarian healthcare system, characterized by seismic shifts from a Bismarckian, solidarity-based social health insurance to centrally planned healthcare pledging universal access to health services as a citizen’s right. After the fall of state socialism, Hungary returned to a social health insurance model, and since then the main policy efforts have focused on decentralization, strengthening of private provision and entrepreneurship, and financial consolidation of the health system. After the highly contested and ultimately failed attempt to introduce managed competition and user fees between 2006 and 2008, there has been a shift back to an increasingly centralized system with tax-based financing. As noted in the chapter, the consequences of recentralization for the solidarity, accessibility, affordability, and quality of healthcare in Hungary are still to be seen.

Russia has the edge in managed competition with Turkey

Significance They have backed opposing sides in the Syrian and Libyan conflicts and pursued different objectives there and in Nagorno-Karabakh, in the hope that conflict trends would benefit either one or the other external power. Despite this, they have avoided direct confrontation through ad-hoc coordination. Impacts Connectivity between different theatres may grow: Turkish gains in one conflict zone will elicit Russian pressure in another. Instability could be mitigated if Western states played a more active role but this is an uncertain prospect. Moscow will leverage the US and more broadly Western absence from key flashpoints.

Ordoliberal Foundations of European Economic Policy: Myths and Reality

Received 20.09.2020. The theme of the role and place of ordoliberal views in contemporary European economic policy has attracted attention of many researchers. While some scholars raise their concerns about the ongoing ordoliberalization of Europe and criticize the ordoliberal foundations of the European Union, the others call for the restoration of the ordoliberal principles in economic policy and argue about the necessity of ordoliberal reforms. This article is focused on this discussion and aims to assess the various arguments that use the ordoliberal issue to justify their positions. The analysis leads to the conclusion that this discussion very often faces misinterpretations of the main outlook of the ordoliberal theory, what can be explained by the dominant role of Germany in the European political scene, complexity of the relationship between ordoliberalism and the social market economy model, as well as by political, economic and ideological motives. For ordoliberals, the main task for the state was to create and maintain a competitive order that will allow market forces to distribute the wealth according to merits and will result in what can be called achievement of social justice. Meanwhile, it has become apparent that European policymakers have noticeably eschewed the competitive order proposals, and modern arrangements of the European economy might be better characterized in terms of regulatory capitalism and managed competition. Moreover, it can be argued that the raising concentration of economic power makes the appeals for the return to the ordoliberal principles very reasonable. The Freiburg school ideas continue to be a real alternative not only to the neoclassical mainstream, but also to the socialist wishes to control and direct economic and social processes.

Resilient managed competition during pandemics: lessons from the Italian experience

One of the main governance decisions that policymakers need to make is whether to implement public services via centralized or decentralized forms. As Costa et al. discuss in their article, when public services are implemented via competing systems, service providers contend to provide good services with the ultimate objective of gaining market quota. This is known as managed competition (MC), as the authorities will have to manage the panoply of public and private organizations offering the service. The alternative is to manage the service more centrally, in what it is identified as vertical integration. As the authors describe, several governments around the globe have abandoned their vertical integrated models in favour of decentralized models. This is the case, as the authors recall, for most health services in Europe. While there is an emerging body of evidence suggesting that decentralized MC outperforms vertically integrated models both in terms of efficiency and in terms of service quality, little is known on how these systems react under different circumstances. This means, for example, how these systems can cope with a sudden increase in their service demands.