CHOICE AND EQUALITY: ARE VULNERABLE CITIZENS WORSE OFF AFTER LIBERALIZATION REFORMS?
| Published date | 01 March 2015 |
| Author | SEBASTIAN JILKE |
| Date | 01 March 2015 |
| DOI | http://doi.org/10.1111/padm.12102 |
doi : 10. 1111/p adm .12102
CHOICE AND EQUALITY: ARE VULNERABLE CITIZENS
WORSE OFF AFTER LIBERALIZATION REFORMS?
SEBASTIAN JILKE
In recent decades, we have witnessed a massive restructuring of public service delivery mecha-
nisms, including service liberalization reforms, the pursuit of the choice agenda, and the creation
of quasi-markets. A central aim of these reforms was that citizens should receive better value for
money through greater competition among service providers. However, it is debated whether all
layers of society are equally able to benet from these developments. We assess the equality in cit-
izens’ choice behaviour with regard to liberalized services of general interest across 25 countries
of the European Union. Our ndings show that the gap between less and better educated service
users, in terms of actual switching behaviour, widens once a considerable degree of service liberal-
ization, as evidenced by the number of service providers, has been achieved. However,this has been
found only in the mobile telephony sector and not in the less competitive market of xed telephony
services.
INTRODUCTION
Although citizens’ responses to poorly performing public services have featured on
the research agenda for some time (see most prominently, Hirschman 1970; Lyons et al.
1992), recent years have seen an upsurge in interest in studying responses to public
services, including citizen satisfaction (James 2009; Van Ryzin and Charbonneau 2010),
their behaviour when dealing with poor performance (Gofen 2012; Jilke and Van de Walle
2013), and the link between these two aspects (Dowding and John 2011, 2012; Salucci and
Bickers 2011). Following large-scale public service reforms, such as service liberalization,
the pursuit of the ‘choice agenda’, and the creation of quasi-markets (Le Grand 2007;
Clifton and Diaz-Fuentes 2010), attention has been drawn to the outcome of these reforms
for ordinary citizens (Clifton et al. 2011a, 2012; Grosso and Van Ryzin 2012; Florio 2013).
A central aim of these reforms was that citizens, now perceived as consumers (Clarke
et al. 2007), would receive greater value for money through competition among providers.
Public service users, in turn, were thought to be able to make well-informed choices and
opt for the optimal service provider (European Commission 2004). However,it is debated
whether all layers of society are equally able to do so. Commentators have claimed that
the marketization of public service delivery and the insertion of greater choice into the
public sector might well have fostered a ‘two-track’ public service where so-called poten-
tially vulnerable service users are less likely to benet from public service reforms than
their relatively ‘strong’ counterparts (Clifton et al. 2011a; Needham 2003). Despite these
concerns, substantive evidence of negative effects of greater choice on equality in public
service provision is lacking.
In France they have a saying, ‘trop de choix tue le choix’, meaning that too much choice
kills the choice (Economist 2010). While many who study the public sector reject the
notion that increasing choice necessarily leads to a halt in using the service or an end to
switching providers (e.g. Le Grand 2007), in this article we go one step further by inves-
tigating whether ‘too much’ choice harms the choices made by lower socio-educational
groups – those who are regarded as potentially vulnerable service users. In this study,
Sebastian Jilke is in the Department of Public Administration, Erasmus University Rotterdam, The Netherlands.
Public Administration Vol.93, No. 1, 2015 (68–85)
© 2014 John Wiley & Sons Ltd.
CHOICE AND EQUALITY 69
we examine the cognitive ability element of vulnerability by looking at service users’
educational attainment. We investigate whether ‘too much’ choice harms the choices
made by potentially vulnerable service users, such as those who are less well educated.
We look at equality in citizens’ choice behaviour (switching to another service provider)
when it comes to liberalized services of general interest, and particularly in terms of
mobile and xed telephony, in 25 countries of the European Union (EU), by asking if
potentially vulnerable service users become less likely to switch away from their current
service provider once the number of providers increases.
The article is structured as follows: the next section introduces liberalization reforms in
services of general interest and studies that have looked at their effects on citizens’ atti-
tudes and behaviours. We then address the commonly articulated reproach that reforms
for greater provider choice foster inequalities between service user, and discuss the
theoretical and empirical literature regarding reforms in the ‘services of general interest’
telecommunications sector. Drawing upon the literature on biases in decision-making, we
develop our theoretical framework. Subsequently, we introduce our data, measures and
methodology, and then test our theoretical framework. Finally, we discuss the ndings
from statistical tests and extract implications for theory and practice.
LIBERALIZING PUBLIC SERVICES AND ITS EFFECTS ON CITIZENS
The European integration process and the creation of a single market fostered the lib-
eralization of services of general interest and made them subject to greater competition
(Héritier 2001; Prosser 2005), leading to the creation of liberalized markets for public ser-
vice provision (Clifton and Diaz-Fuentes 2010). These markets seek to overcome the mar-
ket failure situations that typically occur when public services are provided through a
monopolistic provider, by establishing amarket environment where, ideally, multiple ser-
vice providers compete for customers (Ostrom and Ostrom 1971; Savas 1987). Further,
through market signalling, this is expected to create incentives for providers to deliver
greater value for money in order to keep existing customers as well as attract new ones.
A key attribute in the provision of services of general interest such as water, electricity,
or telecommunication services is that the classical exit option of completely withdrawing
from the service in question is often not feasible, too difcult, associated with extremely
high costs (see Clifton et al. 2011a), or may even harm citizens’ individual welfare. Services
of general interest are, furthermore, regarded as essential public services and ‘…subject
to specic public service obligations by virtue of a general interest criterion’ (Commission
of the European Communities 2004, cited in Van de Walle 2008, p. 7). It is because of this
general interest character that equality in terms of accessibility and the provision of ser-
vices of general interest is regarded as crucial in all EU member countries (Clifton and
Diaz-Fuentes 2005; Prosser 2005).
For citizens, changing the delivery and supply arrangements of services formerly pro-
vided by public monopolies meant that they were no longer regarded as mere legal sub-
jects, but as vocal and empowered consumers (Aberbach and Christensen 2005; Clarke
et al. 2007). They were put in a position to autonomously make choices about which service
providers best matched their needs and demands. Experiences in the US telecommuni-
cations sector showed that service users were indeed more likely to be better off after
switching (Epling 2002), while evidence from the UK’s electricity market suggests that
some service users failed to identify the appropriate supplier for their levels of consump-
tion (Wilson and Waddams Price 2010). However, greater provider choice has not always
Public Administration Vol.93, No. 1, 2015 (68–85)
© 2014 John Wiley& Sons Ltd.
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