Reshaping the Democratic State: Swedish Experiences in a Comparative Perspective

RESHAPING THE DEMOCRATIC STATE:SWEDISH EXPERIENCES IN A COMPARATIVEPERSPECTIVE

RUNE PREMFORS

In the international discourse concerning recent administrative reform develop-ments there is a dominant overall interpretation propagated by a dominant story-teller: the public management programme (PUMA) of the OECD. This article takesissue with this story, arguing that instead of a singular pattern of adaptation therehave been and there are several different reform trajectories in Western-style demo-cracies, largely predicated on historically determined patterns of state–societyrelations and significant variations in political cultures. A detailed comparativeanalysis of the case of Sweden is here used to illustrate the prevalence of a patternof ‘structured pluralism’ and the fruitfulness of a historical-institutionalist approachto the comparative study of administrative reform.

Like most other Western-style democracies, and probably most other coun-tries as well, Sweden has made a quite persistent effort to reform her publicadministration in the last twenty years or so. As in virtually all other OECDmember countries, reform talk in Sweden has also contained a fair shareof ‘New Public Management’ ideas. But this is far from the whole story; itis not even the most consequential and interesting one. In this article I willgenerally try to position Sweden within the ‘administrative reform move-ment’ in the OECD countries. In the process I will take issue with the reformstory as told by the dominant voices of that ‘movement’, arguing thatinstead of a singular pattern of adaptation there have been and there areseveral different reform trajectories, largely predicated on historicallydetermined patterns of state-society relations and democratic cultures inthe various countries.

ADMINISTRATIVE REFORM STORIES

In the international discourse concerning recent administrative reformdevelopments there are several quite distinct interpretations. Among thesethere are three stories which merit particular attention. Although their sub-ject matter – a plethora of reform measures, big and small, during nearly

Rune Premfors is Professor of Political Science at SCORE (Stockholm Centre for OrganizationalResearch) and Department of Political Science, University of Stockholm, Sweden.

Public Administration Vol. 76 Spring 1998 (141–159) Blackwell Publishers Ltd. 1998, 108 Cowley Road, Oxford OX4 1JF, UK and 350 Main Street,Malden, MA 02148, USA.

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two decades in some twenty countries – is extremely complex and varied,these stories are arguably quite simple in terms of their basic features andthey may be rather quickly told – if not to the full satisfaction of the respect-ive story-tellers themselves. I shall start with the dominant story and thenproceed to the two major rival accounts.

The PUMA storyThere is a dominant overall interpretation of the recent ‘administrativereform movement’. There is also a dominant story-teller: the public man-agement programme (PUMA) within the OECD. During the last decade orso this R&D programme in the area of administrative reform has been verysuccessful in stimulating interest and debate among both member govern-ments and wider audiences and in formulating and propagating a parti-cular mode of thinking about administrative reform. The story, as told byPUMA (OECD 1987, 1990, 1993a and b, 1995) and its inspirers and followers(Holmes and Shand 1995; Schwarz 1994a and b; Lane 1995), contains threemajor elements. First, as most stories go, there is a basic developmentalsequence that could be briefly illustrated as follows:

(1) 1970s: Crisis of the welfare state(2) 1980s: A transitional state(3) 1990s: Arrival of the management state

The factors combining into the welfare state crisis were chiefly these: Toomuch public spending overall and on welfare and associated programmesin particular; too rigid public organizations focused on input factors andrule application instead of cost awareness and performance; and, finally,radical changes in environmental conditions, particularly the arrival of trulyglobal markets in many hitherto protected areas of the economy. The neces-sary adaptations were handled during the 1980s through a set of basicallyrelevant, but still piecemeal and partial measures. In this transitional phasegovernments sought to control public spending, and they launched variousreforms of budgetary and management processes. Their strategies could besummed up by the catchphrase ‘let managers manage’ (Savoie 1994, p. 63).There was a strong emphasis on the decentralization of decision-makingpower, on a new leadership in public organizations and on a new serviceand customer orientation at the production level.

But, the story continues, these measures were not sufficiently radical andcomprehensive. It was not enough to let managers manage through thedelegation of power and through persuasive campaigns about the impor-tance of satisfied clients and customers of public services. In order to genu-inely transform the entrenched welfare state and its rigid organizations intoa fully-fledged management state, governments had to ‘make managers man-age’. Through forceful reforms pursued by powerful, autonomous actorsat the centre of government and aimed at radically changing the structureof incentives of managers and their organizations, the public sector could be

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RESHAPING THE DEMOCRATIC STATE 143

greatly improved in terms of efficiency and effectiveness. The basic norma-tive ideal was the market and the measures taken should include outrightprivatization, and where that was not feasible, the creation of markets ormarket-like conditions as an operative context for (almost) all public organi-zations.

As a second major element, the PUMA story (as many or most storiesdo) also identifies heroes and villains, or leaders and laggards in the marchto the land of plenty. The heroes are in general the Anglo-Saxons, but inparticular New Zealand, followed quite closely by the United Kingdom.New Zealand was already in the mid-1980s pioneering developmentstoward the management state. Ten years later it could still justifiably beportrayed as the most obvious success story. Its status as an undisputedhero was no doubt basically due to the nature of its reforms and theirexplicit founding in public choice thinking in general and principal-agenttheory in particular (Boston et al. 1991 and 1995), but it was also predicatedon its ensuing economic success – by far the most cherished end value inthe PUMA story – which was seen as largely or even entirely anaccomplishment of its radical public sector reforms. What about the villainsand the laggards of the story? It follows quite naturally from the basiccharacter and logic of this kind of account, that laggards are portrayed asbeing in a sorry state of non-modernity, as putting up an ill-informed andessentially meaningless last struggle – not as travelling down an alternateroute leading to a different destination. But there is still hope for the lag-gards. If they only make a serious effort to reform themselves in line withthe leaders, they may catch up.

The PUMA interpretation inevitably has to recognize the great variety ofadministrative reform measures in the member countries, but there is astrong tendency or even bias – and this is the third major element of thestory – to interpret developments in terms of convergence, and a correspond-ing inclination against identifying and discussing signs of divergence. Itwould of course be quite dysfunctional in analyses that are essentially(intendedly or not) ideological tracts, to point to different trajectories. Thetrue accomplishment in the ideology-producing mode of story-telling is tofully convince the reader/listener that there is only one road open to thepromised land.

The plus ca change storyThe PUMA interpretation clearly claims to be based on the kind of ‘realism’which undergirds both public choice and market thinking. People, bothindividually and in groups, normally act in a self-centered fashion. Oneline of criticism against the welfare state paradigm is consequently levelledat its ‘idealism’, or the notion that people spontaneously, or after appropri-ate socialization and persuasion, will act in a solidaristic fashion. Since thisis deemed utterly unrealistic and since the institutional solutions based onsuch notions have proved to be highly detrimental to other values such


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as individual liberty and economic flexibility and growth, processes andorganizations in the public sector must be altered to conform with ‘marketrealism’. Altering the ‘structure of incentives’ for all actors concerned –politicians, bureaucrats, special interest groups and citizens (or, rather,customers) so that they all become subject to ‘market discipline’ will do thejob and is the key to the successful reform of the public sector in this newera of global competition.

A second account of administrative reform developments, here called theplus ca change story, is, by contrast, based on a different brand of ‘realism’,basically questioning the presence and feasibility of instrumental rationalityin all human action, both individual and collective. Here administrativereforms are preferably viewed as symbolic responses to environmentalexpectations (March and Olsen 1989; Brunsson and Olsen 1993). To theextent that public sector organizations change at all, they do so becausethey want to ‘appear modern’. In general there are few or no causalrelations between modern reform talk on the one hand and genuine mod-ernization effects on the other. In recent years (the story goes) there hasclearly been a strong trend towards convergence, not least due to the effec-tive spread of ideas by international bodies such as the OECD, the WorldBank, and the International Monetary Fund. But then again, this is basicallya convergence of the way policy makers (as well as some or mostacademics) talk about reform. The relationship between this new and wide-spread way of talking about administrative reform and actual change inpublic sector practice is tenuous at best.

This story also contains a developmental sequence, but of a different kindfrom that of the PUMA account. It may be characterized as a generalizingand cyclical construction rather than a historicist one. First, changingenvironments and events create a demand for ‘reform’. Then, public organi-zations produce ‘reform talk’ in order to survive and prosper, striving hardto adjust to changing expectations of what it means to be ‘modern’ in thenew environment. But their behaviour is best characterized as hypocrisysince little actual change follows or is attempted in the core practices oforganizations, particularly in response to various ‘planned change’ effortsby central authorities. Finally, as environments change and new eventsoccur, a new cycle of reform (containing no doubt, and again, much talkand little genuine change) begins.

There are few or no heroes and villains or leaders and laggards in thisstory. No wonder, perhaps, since it is basically a story about the futility ofrationally conceived change. No doubt, however, a place of pride is allottedthose who share the insights about this basic futility or ‘realism’ concerning‘planned change’ with the story-tellers themselves. If anybody at all, then,the ‘non-reformers’ of this world are the ‘heroes’ of this sceptics’ tale ofadministrative reform.



The structured pluralism storyThere now exists a limited but significant scholarly literature dealingempirically and comparatively with recent national administrative reforms.With some exceptions, these comparative studies emphasize the consider-able variation that may be observed among nations with respect to reformideas and strategies, contents and impacts. Thus Johan P. Olsen and GuyPeters (1996, p. 13) conclude from the eight-nation comparative study theyhave conducted:

The studies presented in this book show that this reform ideology [‘newpublic management’] was not, in fact, universally accepted and that therewas no general wave of public sector reforms. Across the eight countriesstudied, there were significant variations in the discontent with the pub-lic sector and in the perceived need for radical, administrative reform. . . Ideas about generic management, private business and competitivemarkets as exemplary models for running public bureaucracies, were notadopted with the same ease in the eight countries. In some countries therejection of the private sector exemplar of good management was out-right.

Similar observations concerning variety abound in other recent comparativestudies (Kickert and Beck Jørgensen 1995; Campbell and Wilson 1995;Flynn and Strehl 1996; Hill and Klages 1995; Laegreid and Pedersen 1994;Massey 1993; Naschold 1995; Savoie 1994; Wright 1994). As often as not,these observations contain a criticism of the OECD/PUMA interpretationof developments for its unjustified stress on similarity and convergence.And frequently, the analysis is developed further to include observationson causal factors behind this variable pattern, typically stressing the impor-tance of historical and structural determinants. While the analysis may thenstop at the point where nations and their reform experiences are charac-terized as essentially unique, many authors also find that there are limits tothe variation observed. Thus Frieder Naschold, in his comparison of elevenOECD member nations writes about a ‘limited plurality of developmentpatterns’ or ‘regulatory regimes’ (Naschold 1995, p. 11):

Contrary to the official view taken by the OECD as an organisation, thereis no evidence of a linear homogeneous trend in public sector develop-ment . . . . Indeed, as far as future developments are concerned, conver-gence seems less likely than centrifugal development trends within regu-latory models . . . . Moreover, contrary to the assumptions made by theOECD, the plurality of regulatory regimes makes it impossible to deriveand justify an immanent ranking of these regimes or to presuppose thatone specific regime (particularly the Anglo-Saxon model) is necessarilymore efficient than others.

Naschold himself identifies four such patterns or ‘regulatory regimes’.Others commonly identify three basic (and from many other contexts well-


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known) models – an Anglo-Saxon model, a Nordic (European) model, anda Continental (European) model – while typically leaving other Western-style democracies unclassified.

Our third account of administrative reform developments – here termedthe ‘structured pluralism’ story differs in important respects from both thePUMA account and the plus ca change interpretation. Most importantly, itemphasizes in both empirical and normative terms that there are severalreform trajectories, several promised lands if you wish. While the PUMAmodel’s account of the developmental sequence may fit some countries(Anglo-Saxon in general, and New Zealand and the UK in particular), it isof only limited or no validity with respect to the reform trajectory of mostnations. In normative terms, progress must clearly be measured againstmultiple values; no single yardstick or league table will do. Our view onheroes and villains, and leaders and laggards must also be very different ifwe adhere to the structured pluralism account.

Compared to the sequential logic of the plus ca change story, the struc-tured pluralism interpretation of administrative reform differs significantlysince it finds plentiful evidence of effective causal relations betweennational reform strategies and genuine change. There is, to be sure, far froma perfect match between intent and outcome, and unintended impacts arelegion in administrative reform (as elsewhere) but dominant value sets,specific policy inheritances, and institutional arrangements (including andperhaps particularly entrenched configurations of power) specific to indi-vidual nations or to classes of political systems are obviously reflected inthose genuine changes that are (at least partially and imperfectly) broughtabout by administrative reform. The empirical evidence is now, accordingto the structured pluralism story, simply too rich and convincing for us tobelieve in the general claims of the plus ca change story. And since thisevidence clearly points to the existence of several quite distinct reformtrajectories, we should not listen too attentively to the PUMA story-tel-lers either.

The reform stories and institutionalist theoryIn the late 1970s a ‘movement’ started across many of the social sciences.Its common concern was a strong plea for ‘the rediscovery of institutions’.Since then we often refer to this ‘movement’ as ‘new institutionalism’ or‘neo-institutionalism’. At a closer look, it is obvious that this new insti-tutionalism is composed of a small family of quite different approacheswhich seem to have little more in common than the postulated generalimportance, perseverance and explanatory power of a societal phenomenonlabelled ‘institutions’. Apart from this commonality – which is, however,important – the usual and wide rifts between various social science idealsand approaches concerning issues of ontology, and rationality concepts,seem to be reproduced within the family of ‘new institutionalisms’.

Figure 1 represents an effort to summarize briefly some salient features



FIGURE 1 Three new institutionalisms

of the three most prevalent varieties of new institutionalism. Needless tosay, they are simplified to the point of distortion (for other overviews, seeHall and Taylor 1996; Koelbe 1995; Rothstein 1996; Scott 1995). My argu-ment – more a note than an argued and elaborate case here – is that thereis an obvious fit between the three reform stories identified earlier in thearticle and the three new institutionalisms as outlined in figure 1. Thematching pairs are (probably to nobody’s surprise) the following:

(1) the PUMA story – rational choice institutionalism(2) the plus ca change story – sociological institutionalism(3) the structured pluralism story – historical institutionalism

If you accept, as I do, the structured pluralism story as the most validempirical account of recent administrative reform developments in West-ern-style democracies, there are several good reasons to adopt historicalinstitutionalism as the basic approach in future research. First, in contrastwith rational choice institutionalism (but in common with the sociologicalvariant), it starts from a dynamic view on goals and objectives, and itencompasses the fundamental insight that goals may well be and often areshaped by institutions. The study of administrative reform clearly has tomake room for such complex processes – not even Mrs. Thatcher knewwhere she would go in the beginning (Fry 1995; O’Toole and Jordan 1995;Richards 1997) – and rational choice thinking, where goals are regarded asessentially exogenous and only strategies or means are shaped by insti-tutional factors, will not do the job.

Second, in contrast to both the rational choice and the sociologicalapproaches which share a universalizing ambition, historical institutional-ism aims at no more than middle-range theorizing. This is largely becauseit postulates that history matters, and matters greatly. While sociological


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institutionalism essentially is and must be, rational choice institutionalismmay not always be ahistorical – but still its universalizing character tendsto make it insensitive to the complexities of real history. In practice it almostalways turns out far too whiggish for my taste.

All three reform stories as told above no doubt contain important argu-ments and insights, and all three new institutionalisms have proved to befruitful in empirical research. My own preference is without doubt thematching pair of the structured pluralism story/historical institutionalism,and in the remainder of this article I will use Swedish reform developmentsas my primary empirical case in an effort to establish the fruitfulness ofthat approach to the comparative study of administrative reform.

ADMINISTRATIVE REFORM IN SWEDEN

Here I will first, in a necessarily compressed fashion, chronicle Swedishadministrative reform developments during the last twenty years. Then Iwill discuss Swedish experiences in a comparative perspective, also com-menting on Sweden’s ‘story’ in relation to the three generalizing reformaccounts outlined above. Finally, I will provide an admittedly sketchyattempt to explain Sweden’s administrative reform experiences with parti-cular reference to some basic features of its institutional and policy heritage.

Twenty years of administrative reform in SwedenThere is a quite understandable tendency to view one’s own time as a per-iod of great and exciting events, a period of transition from l’ancien regimeto a new era. In the field of administrative reform in Sweden the last fifteenor twenty years are sometimes portrayed as something radically new anddifferent. Commonly packaged under the label forvaltningspolitik (literally‘administration policy’; sometimes also fornyelsepolitik, meaning ‘renewalpolicy’), administrative reforms are presented as something largely orwholly invented by the present generation of reformers and attentive audi-ences. Historically, this is of course absurd. Every century, beginning atleast in the 1500s, has seen a period of significant administrative reformefforts in Sweden. What is both true and interesting, however, about ourera is that the nature of administrative reform changed in importantrespects from roughly the late 1970s onwards.

As I have written elsewhere (Premfors 1991), the vast effort at con-structing the ‘Swedish model’ of a welfare state, had implied a ‘policy-led’ reform process. As programme was added to programme and neworganizations were created alongside existing ones at a historically uniquescale and pace, there was little room for reflection on specifically adminis-trative issues; such issues were simply secondary to the major ‘task struc-ture’ of policy development. However, they were far from totally absent.For example, in the early 1960s much more comprehensive efforts than hith-erto were made to institutionalize effectiveness and efficiency consider-ations in central government by inter alia reforming the key agencies in that



area (Premfors 1982). And local and regional government reform was alongstanding and recurrent item on the reformers’ agenda (see below). Insum, while administrative reform was neither a new nor a marginalphenomenon in Sweden up until the late 1970s, it was different from whatwas to be. From the late 1970s, administrative reform changed from being‘policy-led’ to what we may (for want of a better term) characterize as‘organization-led’. This paradigmatic shift implied both that the public sec-tor was now increasingly viewed as a set of organizations in deep troubleand that the increasingly necessary administrative reform and improve-ment would have to imply significant changes in the way these organiza-tions qua organizations were designed and run. From being one necessaryand largely unproblematic element in the solution of public policy prob-lems, the public sector (viewed as a set of organizations) in a relativelyshort span of time had turned into a – and according to some the – majorpublic policy problem in Sweden.

This rather dramatic discursive change involved both the ‘power’ andthe ‘money’ aspects of the public sector. The public bureaucracy wasincreasingly seen as both oppressive and/or too autonomous and tooexpensive and/or wasteful. In terms of the developing reform agenda, thepower aspect was emphasized first. In 1976 the social democrats wereousted from power for the first time in more than four decades. Oneimportant explanation of this was a widely shared view at the time thatthe social democratic leadership had increasingly formed a symbiosis ofsorts with the country’s bureaucratic elites. The incoming non-socialistcoalition government did their best to profit from this mood of the countryand among the early measures taken many concerned the problem area ofpublic administration. For example, the new government appointed twomajor ad hoc commissions, one dealing with the problem of red tape ingovernment and the other concerned with more structural issues of centralgovernment control of the bureaucracy. The non-socialist governments –there were three of them during the years 1976–1982 – were also very activein the area of local government reform, stepping up the pace and wideningthe scope of the by now quite persistent efforts at decentralization.

Although actions taken during the period 1976 to 1979 could well be seenas precursors of the more comprehensive attempt at administrative reformthat would follow, it took the final arrival in Sweden of a strong sense ofeconomic and fiscal crisis to bring that kind of major effort about. Thisarguably occurred in 1980 when a consensus of sorts began to form aroundthe position that the exploding budget deficit (reaching a peak of 13 percent of GDP in 1982) was the major public policy problem in Swedish poli-tics (Premfors 1984).

The Social Democrats returned to power following their successful show-ing in the general elections of September 1982. Their success was no doubtpredicated on the conviction of many voters that they were after all morecompetent at governing the country, and particularly at combating rising


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unemployment. They did not win – I can think of no instance anywherewhere this has clearly been the case – due to the attractiveness of theirproposals for administrative reform. But the fact is that they regainedpower with a broad strategy on that issue in their public policy baggage.Key to this strategy was the creation of a new cabinet position and a newministry (Civildepartementet) exclusively concerned with public sectorreform. The strategy was still not exactly an elaborate action programme.It would take the new minister, Bo Holmberg, and his staff about threeyears to develop such a programme, and the effort was surroundedthroughout by much controversy. Considering the ideological profile of theminister, the nature of the conflicts was of a rather predictable kind. Else-where I have analysed the struggle concerning the evolving reform pro-gramme as one among three rather distinct factions within the Swedishlabour movement (Premfors 1991): the ‘decentralists’ headed by the Ministerof Public Administration Reform himself and supported in particular bymany local government politicians; the ‘traditionalists’ led by some cabinetmembers running ‘spending ministries’ as well as public sector unionofficials; and, finally, the ‘economizers’ with the then Minister of Finance incharge and with only scattered support among Social Democrats outsidehis ministry (but vehemently supported by most of the non-socialist oppo-sition and by private business circles).

When the comprehensive public sector reform programme eventuallyappeared, this also marked in practice the end of the hegemony of explicitly‘decentralist’ reform talk and (some) action. The minister was by nowstrongly criticized for engaging in ‘too much talk and too little action’. Andin 1988 the ‘traditionalists’ and the ‘economizers’ banded together, and sawto it that Bo Holmberg never returned to his position as chief reformer afterthe general elections of 1988. The administrative reform policy of the period1982 to 1988 had of course been a series of efforts to modify the ‘power’and the ‘money’ problems of the public sector. The problem for BoHolmberg was that he soon came to be viewed as too oriented towards the‘power’ problems – democratic participation and decentralization – to theneglect of the overall need for a forceful strategy to curb public expenditureand to make public organizations more productive and efficient. The keythemes of this first period of comprehensive administrative reform were,rather, ‘a new public service culture’ and ‘user influence’ or even ‘userdemocracy’. Political and administrative decentralization of a radical naturebut within the context of a public sector essentially unchanged in scope,structure and commitments was the overall conception of reform propa-gated at the time. It far from satisfied the ‘economizers’ and it worried the‘traditionalists’ because of its perceived threat to their most cherished valueof ever-increasing equality of conditions among the Swedish people.

Hindsight makes it possible for us to know that the Social Democratsstayed in power in 1988 despite the evolving mood of the country. Opinionpolls show that both the party leadership and ‘their’ public sector quickly



lost favour with the voters during the course of 1989. The Swedish peoplemoved to the right (as traditionally conceived) in an unprecedented fashion,and as expressed both in terms of party sympathies and in their decliningsupport of public sector institutions. This development together with earlysigns of a resurging economic crisis combined to give the ‘economizers’ theupper hand in public sector reform discussions. Although Civildepartementetwas not dismantled, it was reorganized and reoriented in importantrespects. And public sector reform was from about 1988 either explicitlyconducted by or, at least, run in the spirit of the Ministry of FinancialAffairs. The major efforts were from now on increasingly aimed at restruc-turing central government and at implementing a full-fledged system of‘management by results’. Significantly, the Social Democratic governmentalso greatly modified its views on privatization. As clearly expressed inits Budget bill of 1990, it had now abandoned its principled resistance toprivatization as a reform measure, and it was henceforth considered to bea legitimate option if practised on a limited scale and for ‘pragmatic’reasons. Most importantly, this position implied that in all key areas of thewelfare state – child care, primary and secondary education, personal socialservices, health care and care of the elderly – where services are actuallylargely managed and almost in toto produced by local and regional govern-ment organizations, private providers were now accorded a greater role –albeit as a ‘complementary’ element. The appropriate mix of public andprivate would in principle be a matter of local (and in health care ofregional) government decisions. With regard to the central administrativelevel, the social democratic government launched what it called the ‘admin-istration programme’ in late 1990. The programme implied a number ofrationalization measures and reorganizations in central government. All inall it would imply a ten per cent cut in administrative activities overthree years.

Of course nothing accomplished in the area of administrative reformcould stop the strong currents prevalent in the Swedish electorate at thetime. In September 1991 a majority firmly voted in favour of a non-socialistgovernment. For the first time since 1930 Sweden got a Conservative PrimeMinister. Predictably public sector reform policy was significantly rad-icalized as a consequence. In fact, the programme launched in this area bythe new government was manifestly neo-liberal in philosophy and intent.It contained a big dose of privatization, both in terms of sales of a largenumber of state-owned enterprises (more than thirty according to the earlyplans), and radical ideas about ‘market testing’ as the fundamental principlein all deliberations about the public sector. The reform talk could have beenborrowed from New Zealand and the United Kingdom – and it largelywas. Although the Civildepartementet was not dismantled, it was more mar-ginalized in the field of administrative reforms than it had been during the1988–91 period. Instead reform ideas and actions were planned within anew special unit in the Ministry of Financial Affairs. If there had been some


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doubts before, there was now no gainsaying that public sector reform was,in the view of the reform zealots, mainly or wholly about economy andefficiency.

However, this time around as well, there was a gap between reform talkand reform measures actually decided and implemented. Owing to the fullonslaught of the deepest economic crisis in Sweden since the 1930s, andthe decision by the four-party Coalition government to manage this bymaking a series of deals with the Social Democratic opposition, significantparts of the privatization and ‘marketization’ scheme were halted or at leastpostponed. However, important structural reforms were implemented dur-ing the period 1991–94 – apart from the sale of some state enterprises, anumber of public authorities (mostly but not only in the hybrid form ofaffarsverk, or ‘commercial authorities’) were transformed into public cor-porations; and a plethora of organizational reforms were implementedbased on such concepts as ‘streamlining’ and ‘buyer/seller separation’.

However, the ungrateful and changeable Swedish voters soon desertedthis government as well. Already in 1992 they began to rally behind theparties of the left, and in opinion polls they started to express increasingsupport for and confidence in public sector institutions and activities. Theirflirtation with fully-fledged neo-liberalism turned out to be ephemeral. Itwas difficult not to interpret the resounding victory of the left in the generalelections of September 1994 as anything but a vote of confidence in theSwedish welfare state, or at a minimum, as a protest against any radicaltampering with it.

The return of a Social Democratic (minority) government in 1994 couldin the area of administrative reform best be described as a return to theideas and the pursuits of the 1988–91 period. The pace of privatization andgenerally of ‘marketization’ in the public sector has been slowed down sig-nificantly but has not come to a full stop. The reform talk is decidedlydifferent. Although there is almost as much talk about economy andefficiency, the ideological fervour in support of markets is rarely if everpresent. But there should be no doubt that the ‘economizers’ firmly retainthe upper hand gained within the party around 1988. My prediction is thatlittle or nothing will change in this regard as long as Sweden’s seriouseconomic problems persist. But meanwhile, real changes are at work whichindicate that the true ‘winners’ in the struggle over public sector reform inSweden may well be the ‘decentralists’.

A comparative interpretationAt first glance Swedish experiences with administrative reform during thelast twenty years seem to fit the PUMA story amazingly well. For example,there is little doubt that the transformation in the late 1970s of public sectorreform from a quite patchy and ‘policy-led’ activity into a reasonably com-prehensive and ‘organization-led’ model was a direct response to the econ-omic and fiscal crisis of the Swedish welfare state, which in turn was no



doubt largely due to global economic developments at the time. Andalthough quite comprehensive compared to parallel efforts in many othercountries, the Swedish reforms of the 1980s may well be judged as insuf-ficiently radical. And then, much in line with the PUMA story, the early1990s saw a marked radicalization of public sector reform in Sweden. Thistime around reforms were based on the alleged insight provided by theleaders in the field, that ‘market discipline’ had to be pervasive throughoutvirtually all of the public sector if lasting gains in terms of economy andefficiency should be secured.

No doubt the PUMA story-tellers are quite happy with developments inSweden (OECD 1995). Despite her doubtful past – the epitome of the SocialDemocratic welfare state – Sweden is judged to fare quite well in the leaguetable of member nations. On average, Sweden seems to be somewhere inor slightly above the middle. On some counts, particularly as regards per-sonnel policy and ‘executive agencies’ developments, she may even be closeto the top.

But the PUMA story fits less well when applied to other respects of Swed-ish reform experiences. As regards the story’s developmental sequence, thepost-1994 period is of course problematic. As we have seen, reform devel-opments in Sweden in recent years may most adequately be described asa return to the late 1980s, that is as a retrograde step in terms of the neo-liberal ideals of the PUMA management state. This feature of the Swedishreform story should also serve to remind us that politics, including partypolitics, matters in the area of administrative reform as well. The oft-repeated observation among PUMA story adherents to the effect that‘everybody is doing it – including the socialists’ is arguably only half trueat most. Their predisposition to eagerly collect evidence in favour of conver-gence and generally disregard data on differences encompasses the tend-ency to view ‘socialists’ or ‘labour’ as a singular phenomenon. If there isanything we know for sure from comparative studies of political move-ments and parties, it is that they, despite commonalities like names andcanonical texts, come in all sizes and shapes – that they are evidentlyshaped by their specific traditions and cultural contexts. The observationthat ‘even some socialists are doing it’, is never in the PUMA discoursefollowed by the observation that ‘some (or even most) conservatives arenot doing it’ – which is at least equally true.

Much more importantly, the PUMA story as well as the plus ca changeaccount of administrative reform, each in its own way entices us into neg-lecting the most important set of developments of all in the Swedish set-ting – and, I suspect, in that of many other countries as well. Both stories,despite their many differences tend to focus and thrive on innovativereform talk – PUMA adherents in order to register all signs of success, theplus ca change interpreters in view of reconstructing ambitious reform talkso as to be able to reveal hypocrisy, i.e. the always glaring gap betweenintent and outcome. What both generally risk missing are the more low-


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key and slowly evolving discourses and real changes. In our case this isthe transformation of the Swedish state into what may be characterized as ‘a feder-ation of welfare communes’.

Here I can only provide a brief outline and some scattered illustrationsof the full argument. First, if the public sector is viewed as a large andcomplex ‘bundle of commitments’ between government and citizens of acountry, then this ‘bundle’ is actually bigger today than it was in the mid-1970s in Sweden. It obviously stopped growing through new ‘commit-ments’ during the 1980s, but there is no strong evidence of any rollback inthe overall scope of ‘commitments’ over the last twenty years. For example,no important welfare state ‘commitment’ has been dismantled. Privatiz-ation has occurred, as we saw earlier, but it has only marginally affectedthe core activities of government at the various levels in Sweden. State-owned enterprises have been sold, yes, but since Sweden has, compared tomany other European countries, always had a very small sector of state-owned enterprises, this activity has not generated any dramatic change. Allin all, the state’s income from the sales of publicly owned enterprises duringthe 1990s makes up only a fraction of the state budget deficits in those years.In regional and local government, private providers have, as mentionedabove, been allowed in to a greater extent than before. But again, in mostinstances, their share is quite marginal and their services are mostlyfinanced (indirectly or directly) through public subsidies.

Second, the Swedish welfare state reached its peak through a rapidgrowth during the 1960s and 1970s of local and regional (mostly healthcare) government activities. If we look at the development of public con-sumption, the following picture (table 1) emerges. Slightly different distri-butions may be illustrated by, for example, including transfer payments –but the key observation will not be altered: the Swedish welfare state mostlyconsists of more than 300 local and regional units, to a very large extentgoverning and administering themselves.

Third, the autonomy of local and regional governments has increaseddramatically. A closer look at this development will reveal significantcontroversies, periods of change by fits and starts, and even some instancesof recentralization – but all in all it is a consistent and radical decentraliz-ation that has occurred. It has certainly been a ‘willed’ development. Afterconsiderable hesitation to begin with, the Social Democrats turned aroundduring the end of the 1970s. This development implied the formation of a

TABLE 1 Public consumption. Per cent of GNP

Year Local/regional State Total

1960 8 8 161970 13 8 211980 20 9 291990 20 8 28



formidable political coalition behind the goal of decentralization of politicaland administrative decision-making power. The most consequential resist-ance has not come from any political party but rather by a number ofpowerful state agencies often acting in concert with special interest groups.But arguably such blocking efforts have become quite rare and ineffectivein recent years. In almost all areas a substantial ‘within-state’ decentraliz-ation has occurred in parallel with the transfer of decision-making powerto local governments. The pervasiveness of the forces at work may be illus-trated by very recent developments in the area of labour market policy.This field is not just any public policy area in Sweden. Arguably the wholeedifice of the Swedish Social Democratic welfare state has been built aroundthe idea of full employment accomplished chiefly through an ‘active labourmarket policy’ (Rothstein 1985). The central agency in this area, the LabourMarket Board (‘AMS’), has been immensely powerful, its Director-Generalcabinet member in all but name, etc. And recently (July 1996) the SwedishParliament, the Riksdag, decided that AMS should be cut in half and thatthe 288 local governments of Sweden should take over much of theresponsibility for the formulation and implementation of labour marketpolicy.

Finally, my conclusion is not that there is no truth whatsoever in thePUMA and the plus ca change stories when checked against Swedish experi-ences. Some considerable ‘marketization’ trends may be observed inSweden, and even if the welfare state has not been rolled back significantly,there is considerable drama already in the fact that it has largely stoppedgrowing. It is also true that we easily find a considerable gap between intentand genuine change in the Swedish experiences of reforming the publicsector. The most glaring such gap lies between the sophisticated reformtalk concerned with the strengthening of central control through ‘manage-ment by objectives’ or ‘management by results’ and the limited impact ofsuch processes – since these instruments are arguably founded on the obsol-ete idea that a few hundred people at the centre can in any meaningfulsense govern the actions of hundreds of thousands of other people workingin many largely autonomous public organizations, thoroughly embeddedin local and regional environments all over Sweden. However, some mis-take this new societal configuration for a ‘market’ – which by any reason-able definition it is not. And others keep repeating gloomily that since wenever get what we want we probably did not want it in the first place. Isuggest that this is wrong on both counts.

Explaining Swedish reform developmentsWhy has this radical decentralization occurred in Sweden during the lasttwenty years? Again, I shall be able to provide no more than a bare outlineof a rather complex argument. First of all, it has been a highly desireddevelopment on the part of many consequential actors for well over thirtyyears. Elsewhere I have written about this in terms of two major challenges


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to the ‘Swedish model’ (see Premfors 1991). The first serious challenge ofthe late 1960s and the 1970s was clearly one from the left. While it implieda radicalization of the redistributive element of the ‘model’, it was equallyadamant in its critique of its highly centralist features. Demands for decent-ralization and even ‘direct democracy’ were increasingly voiced in all walksof life in Sweden, including the public sector. The initial reaction of thedefenders of the ‘model’ was one of little understanding and sympathy forthe critique, but in the course of the 1970s a slow but profound reorientationoccurred. Successively, decentralization became a cure of most ills, a meansto most ends, and – often enough – an end in itself. Interestingly, this pro-cess was assisted by the second profound challenge to the ‘Swedish model’,effective from about 1980 onwards, and this time from the right. This chal-lenge obviously aimed at more radical changes, at rolling back the state or,rather, the public sector as a whole and making room for ‘civil society’ ingeneral and free markets in particular. The point I want to make here, isthat this rightist challenge, although aiming much further, typically alsogave support to a sustained decentralization of politics and public adminis-tration.

Second, this discursive dominance of the concept of decentralization inSwedish politics from the 1970s onwards cannot by itself, however, explainwhy a real and radical decentralization has been the dominant feature ofpublic sector developments since then. We need to understand why thiselement of reform has been ‘historically efficient’ and to this end we mustinevitably turn to some prominent and lasting features of constitutionaland administrative history in Sweden. My argument here is that Sweden,contrary to what many believe, has not in any simple sense been a centralistsociety. To be sure, it has had since the seventeenth century a fairly strongcentral government, run by Kings (and the odd Queen) and eventually bydemocratically elected leaders, but also by a powerful class of civil servants;to a large extent Sweden has been a Beamtenstaat, or ambetsmannastat. Thiscivil servant class has since at least the 1720s been able to uphold a consider-able autonomy through the structural feature which is commonly calledthe ‘dualism’ of Sweden’s politico-administrative system – or in modernreform talk, an ‘executive agencies’ model. In addition, Sweden has sincelong combined an elaborate and strong central apparatus with an equallydeveloped local government level. The relative absence of a strong feudal-ism helped to sustain this tradition of local self-rule even through the per-iods of absolutism that belatedly but eventually also became part of Swed-en’s history. From the 1860s a strong local self-government level has beena constituent feature of the Swedish system; in that respect the country hasfew or no rivals.

A powerful and effective central government, retaining many of itscharacteristics of ambetsmannastat, and a consequential local governmentlevel – but also other features of Swedish society such as its modest size,geographical position and homogeneous and widespread population, and



its slow and piecemeal processes of industrialization and democratization –worked against any sustained development towards entrenched liberalismand a nightwatchman’s state during the nineteenth century in Sweden.Quite early in the twentieth century Sweden was well on its way towardsbuilding a welfare state. The strength of the labour movement and the rela-tive weakness of the political parties on the right as well as a consensus-oriented capitalist class, paved the way for this development and took itfar beyond that of most other countries; virtually only the other Nordiccountries may be said to have followed suit, no doubt because similar con-ditions prevailed and the same or similar forces were at work.

The building of a Social Democratic welfare state necessitated a consider-able centralization of political and administrative decision-making. But thehistorical legacies sketched above as well as a number of features of the‘building process’ itself, contained the seeds of destruction of this cen-tralized model of development. The sheer size and complexity of the hugewelfare commitment required considerable delegation and decentralizationof operative and production tasks. By amalgamating local governments ina giant reform effort which reduced their number from about 2,500 to 275in 25 years, these were made fit for the dramatic growth they experiencedin the 1960s and 1970s. This period also saw a great expansion in the num-ber, size and tasks of central administrative agencies.

To make, then, a long and complex story short, my admittedly very sket-chy argument is that the institutional heritage (strong and autonomouslocal governments and central agencies) in combination with several fea-tures of the process of building the welfare state, and the discursive devel-opments in the 1970s and 1980s, have all created a dynamic of radical decentral-ization – which, I suggest, has been the dominant feature of public sectorreform in Sweden during the last twenty years.

Are Swedish experiences unique to that country, or may we observe asimilar trajectory of public sector reform elsewhere? I suggest that there areconsiderable similarities among all four major Nordic countries, and alsothat the Netherlands displays a largely parallel development. Among thesecountries we may arguably construct a hierarchy of leaders and laggards.Without doubt, in my view, Denmark should then be singled out as theleader. There, political and administrative decentralization has gone furth-est in recent years – inter alia because of her reforms aiming at creatingsystems of ‘user democracy’ – and Denmark now serves as an examplewithin the Nordic discourse on public sector reform in this respect. In theNetherlands, the historical-institutional heritage has encouraged reformprocesses to be aimed at a much more significant involvement of ‘civilsociety’ organizations in local decision-making and service production (cf.Kickert 1995). Finally, Norway and Finland may be viewed as laggingsomewhat behind Denmark, the Netherlands and Sweden, but there shouldbe little doubt that the same or similar processes are at work there as well.

In sum, the chief characteristic of this Nordic trajectory is a (more or less)


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radical decentralization of politics and administration, but within a stilllarge public sector and an unchanged or only modestly reduced welfarecommitment between government and citizens. Reform talk has certainlycontained ideas of ‘marketization’ and privatization, but the impact hasbeen small, passing or almost negligible. Ideas of welfare and local demo-cracy have survived and flourished even in hard economic times.

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Date received 12 September 1996. Date accepted 27 June 1997.


Documents

Reshaping the Democratic State: Swedish Experiences in a Comparative Perspective