Marketisation and risk distribution in the outsourcing of public services in Europe

Public sector employment relations have long remained sheltered, operating in a relatively closed environment predominantly shaped by the regulatory power of the state and other domestic actors, while market pressures exercised only indirect and marginal influence. Market-type practices as outsourcing in public services upset this equilibrium by blurring the boundaries between public and private sectors, by altering the system of constraints and incentives governing the functioning of public services and by modifying the traditional distribution of market risks in the employment relations. This article explores the trajectories of transformation of market risks distribution between employees and employers in the public sector and, interconnected, in the private sector that subcontracts the services following outsourcing in public services in Europe, and investigates what determinants shape and explain these distributive outcomes. Empirically, the qualitative research is based on six case studies examined through 88 interviews with key actors complemented by documentary analysis in three «most different» institutional contexts (Italy, England and Denmark) and in two «most similar» sectors of the public administration (local government and healthcare). The article argues that the interplay between the specific national institutional frameworks of labour regulation and the role played by the actors, both the trade unions and the employers, contributed to shape a distribution of market risks along a trajectory of «diverging convergence». On the one hand, the analysis points out different country-specific patterns: a trajectory of hedging of risks in Denmark, transferring of risks in Italy and a dynamic of recommodification in England. On the other hand, an internal convergence across the three countries emerges at the sectoral level. Moreover, the results allow to better qualify the relationship between the state and the market in outsourcing practices, overcoming the traditional classificatory dichotomy between market-making and market-embedding states.