TOWARDS NEW PUBLIC EMPLOYMENT SERVICE? FINDING THE OPTIMAL DESIGN OF PUBLIC-PRIVATE CONTRACTING ARRANGEMENTS. EVIDENCE FROM TWO REGIONAL CASES

Abstract

The latest labour market reforms in Italy have brought the issue of strengthening public employment services (PES) and active labour market policies (ALMPs). With the decree 150/2015, a new policy tool has been introduced for activation purposes: the “reintegration voucher” (assegno di ricollocazione - AdR). It is interesting to consider the nature of this tool, as implementation of a quasi-market model in Italian PES. Labour market policies in Italy have already undergone deep reform process between the second half of the Nineties and the early Two-Thousands. During this phase, there was a combination between marketization and decentralization reforms. Italian regions received policy competence for ALMPs and the responsibility for outsourcing employment services to private providers. These started to follow different logics of contracting-out, thus creating the conditions for a high level of territorial differentiation. Contracting-out of services, however, requires governance mechanisms that can mitigate the risks of opportunistic behaviour of private operators, who can tend to place only less disadvantaged people on the labour market (creaming) or avoid higher efforts to go faster toward remuneration (parking). These effects lead to sub-optimal results in terms of the equitability of the performance. In these terms, an “optimal design” could be approximated as the one able to take into account both economic (efficiency and effectiveness of the performance) and social goals (equity of the performance, avoiding opportunistic behaviour of private providers involved). This analysis is realized by means of a comparison between two regions considered as the two most dissimilar cases in the context of PES Italian regional differentiation: Lombardy and Emilia-Romagna. These two cases can be placed at the extremes of a hypothetical continuum defined on the basis of the degree of market exposure of PES regional models. Lombardy in particular has caught the attention showing a quasi-market model very similar to that of the AdR, giving the possibility to test the mechanisms of the new national scheme, not yet fully implemented, using a local experience already well established. In this way it will be possible to know what the consequences of a greater market exposure of Italian regional PES could be, considering both the impact in terms of effectiveness and equitability of the outcomes. The two cases are comparable not only in terms of capacity building and level of economic development, but especially regarding their political and institutional contexts, being characterized by a symmetrical and divergent trajectory of formation of their models. This has been the result of a layering process favoured in both the cases by a similar strength of different actors’ coalitions. The research then will go for an in-depth analysis of market-based governance in regional contexts, relying on the methodology of policy evaluation, much used for studies in this field.