Public employees and public sector reform implementation

Abstract

Conventional wisdom says that reforms that aim at improving the productivity of the public sector face opposition from public sector employees, and for this reason, tend to be poorly implemented. These claims are not backed by much hard evidence. This paper seeks to fill some of that gap by investigating why an educational reform containing explicit accountability elements is poorly implemented across Norwegian municipalities about four years after the reform has passed the parliament. The empirical analyses provide evidence that municipalities with a large share of public employees are less likely to implement the reform. The relationship seems to be causal. A reduced-form approach is applied, which prevents conclusions about the mechanisms through which the public employees exercise their influence. However, some preliminary analyses indicate that school leaders hold more negative attitudes towards the reform in municipalities with a large share of public employees, potentially indicating that regulatory capture is an issue: school leaders tend to sympathize more strongly with teachers in such environments.