Published on openDemocracy, by Kim Andersen, Nov. 12, 2009.
Author: Victor Pestoff – Summary: The austere public budgets that will come out of the financial crisis offer, as a silver lining, a renaissance in cooperative citizen engagement in the supply of welfare services. Many countries in Europe are searching for new ways to involve citizens and the third sector in the provision and governance of social services. At a general level, the reasons are similar throughout Europe. They include the challenge of an aging population, the growing democracy deficit at all levels, local, regional, national and European, and the semi-permanent austerity in public finances, prior to the recent worldwide financial melt-down. While the impact of this last is yet to be seen on public services, there is a silver lining: now may be the time for expanding the role of civil society and cooperative production of welfare services.
In any given EU member state, the reasons for promoting greater citizen and third sector participation will vary. However, taken together, they imply a continued legitimacy crisis for both the public sector and the market as providers of welfare services. Hence citizens and the third sector are appearing as serious providers of public services in welfare states where they traditionally did not have a major role; in those where they did, their role has been changing. The concept of co-production brings together studies of third sector provision of public services and citizen participation in the production process. So, research on co-production becomes increasingly intertwined with public management research, as witnessed by various publications on these topics in the relevant journals and book series …
… The potential political value added by co-production:
In addition to the individual and collective aspects of co-production, it also implies different types of citizen participation in service provision, e.g., economic, social, political and service specific participation. Moreover, comparative European research on childcare in eight EU countries shows that the degree of participation not only varies between countries, but also with different types of providers of publically financed services. Recent Swedish research on childcare  also demonstrates clear differences in citizen participation when public services, private for-profit firms and social enterprises are compared. It studied the influence of both parents and the staff in four types of childcare service providers: parent co-ops, worker co-ops, municipal services and small private for-profit firms. Both the parents and staff of parent and worker co-ops appear to have more influence than those of either the municipal services or for-profit firms. However, neither the state nor market allow for more than marginal or ad hoc participation by parents in the childcare services. More substantial participation in economic or political terms can only be achieved when parents organize themselves collectively to obtain better quality or different kinds of childcare services than either the state or market can provide. In addition, worker co-ops seem to provide parents with greater influence than either municipal childcare or small private for-profit firms can do, and the staff at worker co-ops obtains maximum influence, resulting in more democratic work places.
Thus, both public services and small for-profit firms demonstrate the existence of a glass ceiling for the participation of citizens as consumers of welfare services. Evidence also suggests similar limits for staff participation in the public and private for-profit forms of providing welfare services. Only social enterprises, like the small consumer and worker co-ops, appear to develop the necessary mechanisms to breach these limits by empowering the consumers and/or staff with democratic rights and influence. But, it is necessary to have a realistic assessment of the range of diverse interests and varying motives for engaging in co-production from the perspective of various stake-holders, i.e., the municipal authorities, professional staff and user/citizens. The authorities and staff will have various economic, political and professional motives, while citizens’ motives are primarily based on economic, social, political and quality considerations. It is also important to understand these differences and try to bridge the gap between them in order for co-production to be sustainable. In particular, long-term or enduring welfare services require repeated and frequent interaction between the professional staff and user/consumers, often on a daily basis. This promotes a formal dialogue between them, something that can help both these groups to mutually adjust their expectations of each other and of the service provided in a way that is beneficial for both. Their dialogue also helps to reduces the transaction costs for providing the services compared to other ways of providing them that do not require a continuous dialogue between the providers and consumers of a welfare service.
These findings can contribute to the development of a policy of democratic governance, both at the macro and micro-levels, one that will not crowd out citizens , but rather may promote greater participatory democracy  and empowered citizenship . However, it is important to emphasize the interface between the government, citizens and the third sector and to note that co-production normally takes place in a political context. An individual’s cost/benefit analysis and the decision to cooperate with voluntary efforts are conditioned by the structure of political institutions and the facilitation provided by politicians. Centralized or highly standardized service delivery tends to make articulation of demands more costly for citizens and to inhibit governmental responsiveness, while citizen participation  seems to fare better in decentralized and less standardized service delivery.
However, one-sided emphasis by many European governments on either the state maintaining most responsibility for providing welfare services or turning most of them over to the market will hamper the development of co-production and democratic governance. As Ostrom emphasizes the state can ‘crowd-out’ certain behaviors and ‘crowd-in’ others in the population. A favorable regime and favorable legislation are necessary for promoting greater co-production and third sector provision of welfare services. Only co-production and greater welfare pluralism can promote democratic governance of welfare services and the welfare state.
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