The Comparative Performance of For-profit Firms, Public Organizations and Social Enterprises in the Field of “Voucher-Services”

The Comparative Performance of For-profit Firms, Public Organizations and Social Enterprises in the Field of “Voucher-Services” in Belgium.
A DEA Frontier Approach

Jacques Defourny and Arnaud Henry Centre for Social Economy, University of Liège (Belgium)

During the last decade, public regulation within social policies has undergone significant transformations in the field of personal and social services. In many countries (United Kingdom, France, the Netherlands, etc.), the introduction of a quasi-market regulation can be observed whose main characteristic consists of a separation of the state’s roles as a funding body and a service provider (Legrand: 1991).

Our paper deals with the “titre-service” (service voucher) system, a Belgian public policy, emblematic of the aforementioned evolution, which was introduced in 2001 into the field of domestic (mainly house cleaning) services. This system has been designed by the public authorities as an instrument for employment creation and a tool to fight the prevailing black labour market. In such a twofold perspective, the government decided to strongly regulate the market by financing about 70% of the cost of the service provision, thereby making the service as affordable as in the former black market. It also made all types of organizations hiring disadvantaged unemployed workers eligible for such a service provision, thus drastically widening the supply-side. So there is clearly a market creation because of the competition among different types of organisations (social enterprises, public organisations and for-profit firms), but it is highly regulated because of the fixed price of the service hour, the required certification of providers and the profile of workers to be hired.

With more than 90 000 newly created jobs, the “titre-service” system has gone beyond its objectives in terms of job creation. However, it is now increasingly observed and analysed from abroad with two key questions: 1) how can such a level of public funding be justified in that “industry” ? 2) given such a public financial involvement and such a mix of goals, how is it possible to evaluate the performance of the different types of providers ?.

We mainly focus on the second question, although also touching the first, on the basis of a in- depth survey which covers about 40 service providers belonging to 7 categories of organizations (including three types of social enterprises). We rely on Data Envelopment Analysis approaches to build efficiency frontiers and to compute efficiency scores of all providers. We especially do so with three different model specifications which include or not indicators related with the quality of the jobs created. We then look at the relation between these efficiency scores and explanatory variables with a “tobit” model in order to determine if ownership structure significantly matters. Results show that the one type of social enterprise performs among the best in any case and two major types of social enterprise seem to perform better than their public and for-profit counterparts when job quality indicators are included in the model.

Bibliography

Commission Européenne (1999), Evaluer les programmes socio-économiques Vol.1, 2, 3 et 6, Office des publications officielles des Communautés européennes, Luxembourg.

Defourny, J., P., Develtere & B., Fonteneau (Eds.) (1999), L’économie sociale au Nord et au Sud, De Boeck & Larcier, Paris/Bruxelles.

Defourny, J. & Nyssens, M. (2001), “Belgium: social enterprises in community services”, in C. Borzaga, & J. Defourny, (Eds), The Emergence of Social Enterprise, Routledge, Londres, 47-65.

Flynn, R. & Williams, G. (Eds.) (1997), Contracting for Health: Quasi-Markets and the NHS, Oxford University Press, Oxford.

Gadrey, J. (1990), “Rapports sociaux de service : une autre régulation”, revue économique 41:1, 48-69.

Gadrey, J. (1996), Services : la productivité en question Desclée de Brouwer, Paris.

Gadrey, J. (2004), L’utilité sociale des organisations de l’économie sociale et solidaire. Une mise en perspective sur la base de travaux récents.

Gilain, B & Nyssens, M (2001), “Belgique : l’histoire d’un partenariat associatif-public “, in J-L. Laville & M. Nyssens (Eds.), Les services sociaux entre associations, État et marché, l’aide aux personnes âgées, La Découverte, Paris, 47-65.

Greenaway, D. (1991), “Markets and Quasi Markets in Social Services: Editorial Note”, The Economic Journal, 101:408, 1254-1255.

Idea Consult (2006), Evaluation du régime des titres-services pour les services et emplois de proximité 2005 – Rapport final, Bruxelles.

Idea Consult (2007), Evaluation du régime des titres-services pour les services et emplois de proximité 2006 - Rapport final, Bruxelles.

Jetté, C. & Lévesque, B. (2003), “Les rapports de consommation et la participation des usagers”, in Y. Vaillancourt, F. Aubry & C. Jetté (Eds.), L’économie sociale dans les services à domicile, Presses de l’Université du Québec.

Knapp, M., Hardy, B. & Forder, J. (2001), “Commissioning for Quality: Ten Years of Social Care Markets in England”, Journal of Social Policy: 30.

Laville, J-L & Nyssens, M (2001), “États-providence et services sociaux”, in J.-L. Laville & M. Nyssens (Eds.), Les services sociaux entre associations, État et marché, l’aide aux personnes âgées La découverte, Paris.

Le Grand, J. (1991), “Quasi-markets and Social Policy”, The Economic Journal, 101:408, 1256-1267.

Le Grand J., Bartlett W., [1993], Quasi-markets and social policy, Macmillan, London.

Marée, M. (2006), “Les impacts collectifs de l’insertion. Définition, typologie et techniques de mesure”, in I. Nicaise, M. Nyssens & M. Marée (Eds.), Economie sociale, inclusion sociale et intérêt général, Politique Scientifique Fédérale / Academia Press, Gand.

Marwell N., McInerney P.-B. [2005], “The Nonprofit/For-Profit Continuum : theorizing the dynamics of Mixed-Form Markets”, Nonprofit and voluntary sector quarterly, vol. 34, n°1, p.7-28.

McMaster, R. (2002), “The Analysis of Welfare State Reform: Why the « Quasi-Markets » Narrative Is Descriptively Inadequate and Misleading”, Journal of Economic Issues, 36:3.

Nassaut, S., Nyssens, M. & A. Henry (2008), “Enjeux d’une coexistence de prestataires à finalité sociale et lucrative, suite a l’introduction, en Belgique, d’un quasi-marché dans le champ des services de proximité”, Impresa Sociale, 2008/3.

Netten, A., McDaid, D., Fernandez, J.-L., Forder, J., Knapp, M., Matosevic, T. & J. Shapiro (2005), “Measuring and Understanding Social Services Outputs”, PSSRU Discussion Paper 2132/3.