Short Report: How to govern and evaluate labour market policies
The Peer Review on governing and evaluating labour market policies was the first in spring 2006, under the umbrella theme ‘Ensuring effective implementation of reforms through better governance’. The Peer Review was hosted by the Swedish Ministry of Industry, Employment and Communications. Eleven countries attended (BE, CZ, DK, FI, GE, GR, IE, LV, NO, RO, SI).
The Swedish policy in brief
In Sweden, like in many EU countries, a large amount is spent on labour market policies. Hence, the core questions concern a) whether the tax payer’s money is used efficiently, and b) how to ensure that the policy objectives are actually met. The Swedish model is characterised by a high degree of delegation and decentralisation of decision-making powers from the central Government to government agencies and to the local level. The aim is to improve efficiency by ensuring that most decisions are taken at a level as close as possible to the people affected by them. Still, performance has to be monitored and evaluated and is reported back to the Government and the Parliament, as policies efficiency and impact influence future decisions.
Over the years, the focus of management has shifted from input management to output management – ie from ‘management by objectives’ to ‘management by results’. The Government and the Parliament formulate objectives to be achieved as specifically as possible. The government agencies then decide how they should be organised and how the tasks should be carried out. They are to measure and report what they have achieved and the resources used for each purpose, not only to facilitate future governmental decisions but also to ensure transparency about their internal decision making processes.
The National Labour Market Board is the responsible authority for reaching the objectives of the Swedish labour market policy formulated by the Government. In addition to these targets, the National Labour Market Board also sets its own and lays down guidelines for the activities undertaken at the local level by each County Labour Market Board. The other government authorities involved in different aspects of governance and evaluation are the National Audit Office, the National Institute of Public Management and the Swedish Unemployment Insurance Board.
In 1997, the Institute for Labour Market Policy Evaluation (IFAU) was established under the Swedish Ministry of Industry, Employment and Communications to study the overall effects of labour market policy in Sweden. The main tasks of the Institute are to promote, support and lead research on the effects of labour market policies, to examine the functioning of the labour market, and to assess labour market outcomes of educational policies. There is a broad consensus that IFAU has been very successful in carrying out its mission. The institute is based at Uppsala University and produces evaluations that are academically rigorous, yet accessible to the policy-making community. One of the keys to IFAU’s success is the availability of high quality data on individuals targeted by the labour market policies. The data are collected by the Swedish National Labour Market Board. The availability of data (data warehouses) is an important pre-condition for valid evaluations, especially impact evaluations.
Despite the numerous evaluation projects, knowledge gaps remain, especially with regard to supplying the policy-makers with a ‘bird’s eye view’ of the labour market, e.g. with strategic overviews, meta-evaluations and process analysis.
Key issues debated at the Peer Review
There was a lively discussion on the Swedish approach and its applicability to the participating countries. There seems to be substantial differences across countries in the degree to which evaluations are used to design labour market policies. Some countries hold strong evaluation traditions (e.g. Sweden, Germany, Norway), in others the culture of evaluation has only recently taken hold, enhanced by the demand for ESF evaluations.
It has been questioned whether the concept of active labour market policy – developed in Scandinavian countries in the 1960’s and focusing on the supply side of the labour market – is the best policy for economies in transition, where job creation, skills mismatch and macro-economic development lie at the core of the reform processes.
One of the dominant issues in the discussion revolved around the most suitable market structure for evaluations. The evaluation market is an imperfect market, with demand monopolies at national and Commission levels. The Swedish quasi-public mode of provision was contrasted with a decentralised, tender-based provision. It was pointed out that advantages of a centralised quasi-public solution are that it secures economies of scale in doing research, it is trustworthy in the eyes of the public, it may produce more policy-relevant research, and it also saves on the costs of tendering for the projects. On the other hand, competitive market may provide greater cost efficiency, greater choice of projects and methods, and encourage innovation. The European dimension of the market for evaluations was also touched upon, and the debates tackled how the EU may encourage the evaluation culture and promote competition and cooperation at the European level.
The meeting also looked at how evaluation results influence policy making. Whereas evaluations often induce reforms of programmes, they rarely have an influence on the introduction of new programmes.
Statements and Comments
Participating independent experts
Higher Institute for Labour Studies (HIVA)
University of Copenhagen
Kari Hietala Ltd.
|Social Science Research Center Berlin (WB)
|National Centre for Social Research (EKKE)
|WRC Social and Economic Consultants
|Institute of Economics, Latvian Academy of Sciences
|Institute for Cocial Research
|National Labour Research Institute
|Faculty of Management