Regulating Private Welfare: The Causes and Consequences of Failures in the Provision of Private Welfare

Abstract

The welfare state is undergoing profound changes. In most Western countries private elements are introduced in formerly public welfare systems. These processes of privatisation mark the transformation from the conventional welfare state, in which the government fulfils the role of a public provider, into what is labelled a regulatory welfare state, a state in which the government becomes the regulator of the private market. The transformation towards a regulatory welfare state marks a change in emphasis that is given to the three general principles of ordering society: the state, the market, and the civil society. Within this ordering triangle, the market receives a more prominent role. The privatisation of the reintegration market forms an interesting example of the transformation towards a regulatory welfare state.

Until now, the private reintegration market has, however, not lived up to its expectations. In this paper the causes and consequences of failures in the provision of private reintegration services are analysed. Analysis of the failures in the provision of reintegration services in the Dutch reintegration market shows that the causes for the failures originate from the ordering principles market, as well as state and civil society. In the course of the existence of the Dutch private reintegration market, some initial steps have been made in order to receive a better balance between the ordering principles state, market, and civil society. However, further improvements in the functioning of the private reintegration market can and need to be made.

Keywords: regulation, privatisation, regulatory welfare state, reintegration market

JEL Classification: I3, H4