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The influence of efficiency and legitimacy on
public procurement: the case of Youth care in
Dutch municipalities
June, 2017
Anniek Helena Vleems
Student number: S3026906
a.h.vleems@student.rug.nl
or
ahvleems@gmail.com
+31 (0)610740343
Master Thesis MSc. Organizational & Management Control (Business
Administration) Faculty of Economics and Business University of Groningen
Supervisor RUG: dr. E.G. van de Mortel
Co-assessor RUG : dr. I.J.J. Burgers
Word count:14205 (excl. Appendices:15862)
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ABSTRACT
2 Index
1.Introduction……… 4
2. Background………... 7
2.1 Implementation of Youth care by municipalities………..……….. 7
2.2 Types of procurement………...……….. 9
2.3 Types of funding………..………... 11
3. Literature review……….. 13
3.1 Uncertainty around youth care tasks………..………..……….….. 13
3.2 Institutional theory………..……….…... 14
3.3 Choice for Isomorphism and TCE to study procurement…..………...………..… 15
3.4 Homogeneity and heterogeneity in public procurement………..………... 16
3.5 Isomorphism………..………. 17
3.6 Transaction cost economics……… 18
3.7 Towards the conceptual model………... 19
4. Methodology………... 21
4.1 Method of data collection………... 21
4.2 Interviews method……….……….. 21
4.3 Development of interview questions……….. 22
4.4 Selection of respondents………. 22 4.5 Data analysis………... 23 5. Results……… 25 5.1 Procurement………. 25 5.1.1 Procurement model…….……….……….. 25 5.1.2 Funding model……….………... 25 5.2 Isomorphism……….27 5.2.1 Coercive isomorphism……….……….………. 27 5.2.2 Mimetic isomorphism………. 28 5.2.3 Normative isomorphism….……….………... 28
5.2.4 Homogeneity in procurement due to pressures from isomorphism.……….…………. 29
5.3 Transaction cost economics……… 30
5.3.1 Asset specificity………..………... 30
5.3.2 Uncertainty……… 31
5.3.3 Frequency of the transaction………..………... 32
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6. Discussion and conclusion……… 35
6.1 Answering the research question……… 35
6.2 Comparison of findings with academic literature ……….. 36
6.3 Theoretical and practical implications……… 38
6.4 Limitations & future research………. 39
7. References………..……… 41
7.1 References from academic literature……….. 41
7.2 Online references……… 43
8. Appendices………. 45
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1. INTRODUCTION
“ Increasing the effectiveness, efficiency and compliance of public procurement has become an
ongoing concern for governments” (Patrucco, A. Luzzini, D. & Ronchi, S., 2017 p739 )
A survey of Binnenlands Bestuur and the NOS on the expectations of the youth care budget shows that nearly six out of ten municipalities ended the year 2016 with a deficit in the youth budget (NOS, 2017). In 2015, municipalities were given the responsibility for youth care tasks from the central government. This institutional change had several goals such as higher care quality, improving social support, improving efficiency and lastly providing care at a smaller budget (Child & youth act, 2015). To achieve these goals the Dutch central government choose to decentralize the authority because a local approach and autonomization would help striving for more economic efficiency (Child and youth act, 2015). However, since the decentralization the differences between municipalities are growing and residents are afraid this will result in inequalities regarding availability and quality of care (NOS, 2015). The Transition Authority Youth (TAJ) is also worried about the availability and quality of youth care. The authority is part of the ministry of health and is investigating how the decentralization is taking place. The budgetary problems and its impact on the quality and availability of youth care are threatening to become structural, says the TAJ in a research report (NOS, 2017). The authority is especially worried about institutions offering specialized youth care. They are concerned that one of the five specialized care providers will face major financial problems in 2017 (NOS, 2017).
Since the decentralization municipalities procure youth care services from care providers in the region. There are two main reasons for procurement in the field of care that create a public sector structure that is designed to reap the efficiency gains of free markets without losing benefits of traditional systems (CPB, 2015). Namely, municipalities can take advantage of the economies of scale and the high level of expertise that is present in the external care field. The second reason being that procurement allows for market mechanisms which have the potential to enhance efficiency through pricing. To what extent municipalities actually harvest these benefits depends largely on how they shape the procurement of outsourced tasks (Centraal planbureau, 2015). However, uncertainty factors form a significant barrier to the success of municipal procurement for specialized youth care (Bekkers, 2017; NOS, 2017). The inherent uncertainty in the public procurement process originates from the complexity and dynamism of the specialized youth care and is fueled by the many political influences in the public sector (Lapsley and Skærbæk, 2012).
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of youth care. A third very relevant uncertainty has to do with the quality of youth care. Since municipalities lack extensive knowledge about the demand in the care field, it is a very relevant risk that municipalities fail to procure for sufficient quality (Limburg, 2016; Norbuis, 2016). Due to insufficient knowledge about youth care municipalities easily choose to fund with a lump sum whereas alternative funding models provide stronger incentives for efficiency, but do not come without a risk of loss of quality (CPB, 2015). And last but not least, political influences form a significant uncertainty. Political influences cause uncertainty because on the one hand municipalities are obligated to conform to rules imposed by the central government, while on the other hand they receive quite some freedom due to the fact that very few guidelines for procurement are being provided since the authority for youth care was decentralized (Bekkers, 2017).
There are two opposing forces that both influence public procurement. The responsibility politicians have for democratic accountability and the delivery of procurement implementations that align with organizational efficiency (Murray, 2009). From an institutional perspective, the focus is on legitimacy via adherence to institutional norms, societal expectations and rules, also known as isomorphism. Isomorphism is expected to result in similar procurement practices (Nee & Cao, 2015). Whereas from an economic perspective efficiency arguments are used to accomplish cost minimizing and efficiency maximizing activities, also known as transaction cost economics (TCE). TCE is expected to result in varying procurement practices. Procurement decisions should always be consistent with organizational objectives set by local politicians (Murray, 2009). Thus, in public procurement both legitimacy towards institutional environment and economic efficiency have to be taken into account. However, literature describes that it is difficult to equally respect both forces (Ter Bogt, 2004). Organizations that want to conform to the institutional environment increase positive evaluation, resource flows, and survival chances but reduce organizational efficiency (Zucker, 1987; Scott & Meyer, 1991;Ter Bogt, 2004). The struggle between the opposing forces could become threatening for the quality and availability of specialized health care services (Asquith, Brunton & Robinson, 2015).
The purpose of this research is to consider both isomorphism & TCE and how they influence municipal procurement for specialized youth care. In short, the research attempts to capture the simultaneous influence of legitimacy and efficiency on procurement practices. The complex and dynamic nature of specialized youth care services provides an appropriate ground for investigating why one pressure might be stronger than the other in influencing procurement practices. This results in the following research question: How do pressures from efficiency and legitimacy influence public procurement within municipalities?
Several sub-questions which will help answer the main research question are:
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2. What does environmental uncertainty entails for Dutch municipalities in procurement for youth specialized care?
3. "What does isomorphism look like for Dutch municipalities?"
4. "What does TCE look like for Dutch municipalities?"
The theoretical contribution of this study is in threefold. First this study contributes to the literature in the field of organizational control, considering public procurement is now moving towards a more strategic role and the concept of a procurement strategy in the context of the public sector has been relatively under-investigated (Patrucco, et al, 2017). Secondly, since the introduction of new public management (NPM) the efforts to direct academic focus towards efficiency in the public sector have increased (Lounsbury, 2008). However, the transaction cost approach has not been used in great detail to investigate the public sector. Consequently, there is insufficient knowledge about TCE and isomorphism in relation to procurement practices. Since both pressures appear to be present within municipalities in the Netherlands, it is interesting to see if one might be stronger than the other in influencing the procurement practices. Third, this study can help to increase the generalizability of existing theories on isomorphism or TCE within municipalities. The managerial contribution of this paper mainly is that it will provide insights into controlling the public sector; the research can provide insights into policy making and procurement practices for local governments. Finally, by addressing a subject that is part of the present-day discussion, namely municipalities being responsible for youth care tasks and how this relates to the equalities in availability and quality of youth care, this research also contributes to public interest.
7 2. SECTOR DESCRIPTION
This section will answer sub question 1: "What do the responsibilities for youth care look like and what different types of procurement practices are present within municipalities?". From 2015 municipalities became responsible for a substantial part of the social domain. Responsibilities have grown due to decentralization of three responsibilities of the central government to municipalities. Since 2015 municipalities are responsible for the procurement of (1) social support and daily activities, (2) employment for chronically ill & elderly and (3) youth health care (Movisie, 2015 & Rijksoverheid, 2016). First, municipalities now provide income support as well as social welfare services such as subsidized employment (CPB, 2014). These duties belong to the Zvw. Second, municipalities became responsible for supporting of people with physical or mental health problems in their home environment. For example, assistance for elderly of disabled people at home (CPB, 2014). These duties fall under the Wmo. Third, they became responsible for all youth care services for children up until 18 years old. Ranging from universal and preventive services to highly specialized care. In specific the youth health care system has recently undergone major changes because municipalities are now responsible for all youth care services while they previously only had ten percent of the responsibilities (Rijksoverheid, 2014). The focus of this research is therefore on the youth care service.
2.1 Implementation of Youth care by municipalities
Figure 1 illustrates the Dutch Youth Care system. The Dutch youth care and welfare system consists of different services: universal services, preventive services and specialized services as is shown in figure 1. Examples of universal services include youth work, child care and education services. Preventive services include child health care, social work and parenting support. And examples of specialized services include youth care services, youth mental health care services, lightly disabled youth services and child protection services (Netherlands Youth Institute, 2016). Specialized care services receive the least residents but the costs for specialized care services exceed the other forms of care (NYI, 2016). From 2015 municipalities also bear responsibilities for specialized youth care (secondary care). One of the goals of the new youth act is to: decrease the number of children in specialized care by increasing preventive and early intervention support, and to promote the use of social networks within the direct environment of children (Bezemer, 2017; Youth act, 2015).
8 which 7,5 % receive specialized care (NIY, 2016).
The focus of the research is on specialized youth care only. The specialized youth care tasks were chosen for two reasons. First, in early research it became clear that specialized youth care involves many uncertainties when it comes to both budgets and quality of care (NOS, 2017). Second, general youth care and preventive youth care were already municipal tasks before the decentralization and therefore less interesting to investigate.
Figure 1, Dutch youth care system
Source: Netherlands Youth Institute (NYI), 2016 p3
By decentralizing the organization and procurement of youth care from the central government to the municipalities, the services should become more integral and more effective. In addition, the
decentralization should provide opportunity to improve the quality of care at a smaller budget. Other goals set by the government in the youth act are (NYI, 2016):
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- Coherent support for families: 1 family, 1 plan, 1 director.
Municipalities are responsible for the procurement of youth care and this comes with some freedom related to policy making. But restrictions form the central government remain, for example budgetary restrictions or provided frameworks (CPB, 2015).
2.2 Types of procurement.
Municipalities purchase the specialized youth care tasks, also called secondary care, from youth care providers. This process is called procurement. Municipalities often buy specialized youth care in partnership with other municipalities (VNG, 2016). It appears that there is not a single recommended scale for collaboration. Municipalities analyze per task what the most adequate approach is: local, regional, or national collaboration. The Netherlands consists of 42 youth care areas who differ in size and density of the population (VNG, 2016).
Collaboration between these areas started with scanning and discussing what the most adequate approach should look like. For municipal procurement, a general distinction is made between 6 procurement models (VNG informatiekaart, 2014): Governmental procurement, Multiple Private procurement, “Zeeuws” model, Classical procurement, Best value procurement and private auction as shown in figure 2. The information provided in the third column of figure 2 originates from the CPB (2016). The chosen purchasing methods are governance mechanisms for the municipalities and help determine the way in which youth care institutions organize their youth care and the degree of effectiveness.
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Figure 2, Procurement method in combination with funding method Procurement
method
Description Funding method
1 Governmental procurement (54%)
Interested care providers are invited to plenary negotiate contractual terms including quality, payment and duration. Determining contractual conditions together with care providers, thus using the knowledge of the care provider
● Task oriented method (45%) ● Effort oriented method (4%) ● Output oriented method (51%) 3 “Zeeuws” model
(17%)
Municipalities predetermine price, performance conditions, and quality standards. In most cases, the contract is only a framework agreement in which there is no revenue guarantee. This is namely determined by the clients. They have freedom to choose one of the selected suppliers to exercise their demand directly.
● Task oriented method (51%) ● Effort oriented method (49%) ● Output oriented method (0%)
2 Multiple private procurement method (17%)
With multiple private procurement, private parties make an offer, hereafter the municipality makes a selection of parties with whom they want to negotiate. Hence, the difference with the Zeeuws model, is that contracting is individual and price is not predetermined
● Task oriented method (95%) ● Effort oriented method (0%) ● Output oriented method (5%)
4 Classical
procurement (8%)
A public request for supply is placed, mostly a very specified request. All interested parties can react by making an offer in which they describe how they will meet the specifications. The request is placed on a public platform which increases competition on price and quality level.
● Task oriented method (87%) ● Effort oriented method (7%) ● Output oriented method (7%) 5 Best value
procurement (3%)
The municipality makes a request for supply, mostly in very general terms. Interested providers can react by making an offer in which they describe price and quality. Prices are not
predetermined by municipalities. With BVP, creativity for innovative solutions is encouraged.
● Task oriented method (70%) ● Effort oriented method (30%) ● Output oriented method (0%) 6 Private auction
procurement (1%))
Firstly, interested parties must conform to certain criteria including quality requirements. These pre-selected providers can then bid to care per client when a demand is exercised.
● Task oriented method (100%) ● Effort oriented method (0%) ● Output oriented method (0%)
11 2.3 Types of funding
Recent debates have been about the budgets for procurement and the quality of specialized youth care. Bezemer & Kalverboer (2017) see a significant increase in the number of emergency placements in specialized youth care from 2015. According to the Children’s ombudsman this is the result of budgetary cuts (Kalverboer, 2017). Budgetary cuts force care suppliers to deliver more work for the same prices, as a result no significant attention is paid to preventive care and more children end up in the specialized youth care according to Kalverboer (2017).
Custom made care is formulated as follows in the Youth Act: "it is tailored to the local situation and based on the possibilities (own strength) and the needs of individual youth and their parents" (Youth act, 2015). This suggests that customization will be achieved in consultation with children and their parents, taking into account the context and individual needs of those involved. The needs and interests of residents for specialized youth care are mostly multiple and pluralistic. There is a great demand for custom made care in the specialized area (CPB, 2015) which sometimes makes it hard for municipalities to procure for sufficient quality.
With regard to the quality of specialized care it appears the funding method, also shown in figure 2, is even more important than the procurement method (CPB, 2015). This is due to the incentives that come with the different funding methods. The VNG Working Document (2015) describes that there are currently three different methods in the Netherlands to fund the procurement of specialized youth care services; tasks-oriented, effort-oriented and output-oriented.
- With the task-oriented funding method the municipality provides the care provider with an integral budget for the sector it is responsible for. The care providers are completely responsible for the expenses of this budget. Mostly the agreement between municipality and care providers is based on a minimum number of clients.
- The effort-oriented funding method is comparable to the way youth care was procured before the decentralization. This method is known for combining individual products into a service and communication on product level. Due to administration being done on product levels, the
administrative costs are high. In addition, the care provider is not responsible for the result, it only has to provide the care product and gets paid per hour.
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3. LITERATURE REVIEW
This chapter describes the concepts within the literature that are used in this study and concludes with the conceptual model. Isomorphism and TCE will be discussed because they have different influences on municipal procurement. But first this chapter elaborates on the uncertainty in procurement for specialized youth care and will answer sub question 2: What does environmental uncertainty looks like for Dutch municipalities in procurement for youth specialized care? After that the institutional theory will be described with emphasis on isomorphism and with that sub question 3: "What does isomorphism look like in the public sector?" will be answered. Lastly, the pressures for efficiency in municipalities will be explained by answering sub question 4: "What does TCE look like for Dutch municipalities?".
3.1 Uncertainty around youth care tasks
“An individual experiences uncertainty because an individual perceives himself to be lacking sufficient knowledge/information to accurately predict events or because the individual feels unable decide what is relevant or irrelevant data” (Milliken, 1987, p 143). Since the needs and interests of residents of specialized youth care are often multiple and pluralistic, municipalities have to deal with many uncertainties in procurement (CPB, 2015). Uncertainty adds to the complexity of a project, so can be considered as a constituent dimension of a project (Williams, 1999). Uncertainty and complexity are seen by William’s (1999) as the overall difficulties and messiness of a project. The lack of information can be due to the decision-related items being difficult to understand (complexity) and because the nature of the environment is unpredictable and changing (dynamism). Organization theorists have focused particularly attention on the concept of "perceived environmental uncertainty" because detailed information about that environment is required to make decisions but that information is almost never complete, especially in the public sector (Yanes-Estévez, Oreja-Rodríguez & Alvarez, 2004). Figure 3 illustrates the effect complexity and dynamism have on perceived environmental uncertainty (PEU).
Figure 3 perceived environmental uncertainty
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In procurement for specialized youth care, both the complexity of the required care as well as the dynamism in the sector is high. Starting with environmental complexity, it describes the heterogeneity and the dispersion/range of markets and services (Dess and Beard 1984). Procurement comes with complexity for three reasons. First, the needs and interests of residents of youth care are often multiple and pluralistic. Second, the interests of the executive party usually never fully match the interests of the municipality (CPB, 2015). When a substantial responsibility is given to public care field, overproduction is a risk. Complex tasks are generally hard to measure and less verifiable. Since parties’ interest may not completely match, monitoring and selection play a pivotal role in the procurement of youth care. A third, very relevant source of complexity has to do with quality of youth care. Since municipalities lack extensive knowledge of the demand in the care field, it is a very relevant risk that municipalities fail to procure for sufficient quality (Limburg, 2016; Norbuis, 2016).
The complexity dimension originates from characteristics of public procurement in general. Organizational dynamism, turbulence and instability in environment, occurs through the introduction of strategic management and vertical integration (Dess and Beard 1984). Politicians have a dual responsibility for democratic accountability and the delivery of procurement implementations that align with organizational objectives (Murray, 2009). From an institutional perspective, the focus is on legitimacy via adherence to institutional norms, societal expectations and rules (Nee & Cao, 2015). Whereas from an economic perspective efficiency arguments are used to accomplish cost minimizing and delivery time activities.
3.2 Institutional theory
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NIE focuses on organizations or individual actors trying to act as optimal and efficient as possible within
the constraints imposed by the external environment; limits of rationalism and opportunism (Williamson, 1999). The NIE is an economic direction that seeks to expand the concept of economy by focusing on the social and legal norms and rules underlying economic activities (Williamson, 1999; Coase, 1988). The new institutional economy has its roots in the fundamental work of Ronald Coase as regards the critical role of the institutional framework and transaction costs on economic performance (Alston, 2008). The term "New Institutional Economy" was introduced by Williamson in 1975. Both Coase and Williamson have an eye for efficiency, distribution and procurement (Alston, 2008).
NIS also considers the influence of external environmental pressures but from a wider perspective
(Tsayemi, 2006). NIS questions how organizations are influenced by the external institutional forces (Burns & Scapens, 2000). NIS proposes that organizations need to conform to institutional rules, symbols, beliefs and norms in order to legitimize their existence (Tsayemi, 2006). This can be formal institutions, for example the government, or informal institutions in the external field. According to DiMaggio & Powell (1983) isomorphism theory, organizations protect their resources, partners and customers to comply with what is expected from the environment.
In short, NIE and NIS use different definitions for institutions in the sense that the former tendency is open to efficiency pressures, and that the latter tendency is open to conformity pressures. In this study, transaction cost economics from Williamson (1985) is used to address the efficiency point of view and institutional isomorphism from DiMaggio and Powell (1983) will be used to address legitimacy pressures.
3.3. Choice for Isomorphism and TCE to study public procurement
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are: economic development, social inclusion, the protection of minorities, and environmental policy. Especially legitimacy factors, from socio-economic goals, were found to be deviating from efficiency goals (Erridge & Hennigan, 2012).
Therefore, this study uses the institutional theory and focuses on the different influence legitimacy and efficiency have on procurement for specialized youth care. Uncertainty factors from complexity and dynamism feed the conflicting of goals (Dess and Beard 1984) in case of procurement for specialized youth care.
3.4 Homogeneity and heterogeneity in public procurement
Lounsbury (2008) states that many researchers have used institutional theory to emphasize on governmental homogeneity. DiMaggio and Powell (1983) stated that fact that firms have tendency to adopt similar practices is caused by uncertainty, and can be captured in the notion of institutional isomorphism. Pressures from isomorphism result in municipalities adopting similar procurement practices.
On the other hand, TCE’s assumption is that changes in organizational structures, such as autonomization, are a result of striving for economic efficiency (Ter Bogt, 2004). literature emphasizes on the importance of innovation in the procurement for youth care (Nederlands Jeugd instituut, 2017). Improving the quality of youth care through innovation is one of the driving forces behind the youth act (NIJ, 2017). Meaning that every individual municipal partnership has to find its own way to optimize the youth care processes in collaboration with the care providers. Efficiency is an essential part of that quality according to NIJ (2017). Here from can be stated that striving for efficiency results in heterogenic procurement practices. This is in line with the TCE which e.g. Coase (1988) and Oliver, Williamson and Winter (1999) use to investigate the heterogeneity of organizational practices. Coase (1988) states that by allowing a firm to direct the resources, it is able to save costs. Consequently, firms originate because of the presence of transaction costs. This is supported by Williamson: “if transaction costs would be negligible, the organization of economic activity would be irrelevant as the advantages of organizing would be eliminated by costless contracting” (1979, p 233). Concluding, literature proposes that pressures from isomorphism result in an increase in homogeneity of procurement practices while pressures from TCE result in heterogeneous procurement practices. Both isomorphism and TCE are classified as institutional theories, in this study attention will be paid to both.
3.5 Isomorphism
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fields to adopt similar systems and processes to obtain legitimacy. Isomorphism consists of three forms: coercive, mimetic and normative (Tsamenyi et al, 2006).
Isomorphism is coercive when an organization adopts certain norms because of pressures of those they depend on externally (DiMaggio & Powell, 1983). For example, when central government, a powerful organization, exerts pressure on a municipality to act in compliance with certain actions and behaviors. Oliver describes coercive isomorphism as:” a conscious obedience to the incorporation of values, norms, or institutional requirements” (1992, p 152).
Mimetic isomorphism can be described as a risk averse strategy. It occurs when organizations intentionally copy policies from comparable organizations due to their own uncertainty or uncertainty in the market they operate in (Goddard et al, 2016). The environment of youth care is quite uncertain for municipalities because of their insufficient knowledge of youth care and the demand for custom made specialized care. Since the public sector is uncertainty avoidant, they tend to look at best practices of other and copy those policies (Goddard et al, 2016).
Isomorphism is normative when pressures stem from professional groups or communities. Within the care field it was the Dutch ministry of Health together with the association for Dutch municipalities (VNG) who made recommendations for the procurement process (Tweede Kamer, 2013). Frumkin & Gelaskiewicz (2004) state that for public sector organizations, in particularly coercive and normative pressures seem to result in adopting similar practices. Literature on isomorphism results in the following proposition.
Proposition 1: Coercive, mimetic and normative pressures from isomorphism lead to homogeneity in procurement for specialized youth care services.
3.6 Transaction Cost Economics (TCE)
The aim of the youth care decentralization is that the tasks were given to local governments because they are closer to the residents and the local providers. Consequently, they are better able to find out what care is needed and what is the most efficient procurement approach for their specific region. TCE is often used in procurement studies because of its emphasis on efficiency and transaction. According to Williamson (1999), a transaction occurs when a good or service is transferred.
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inadequate adaptation, haggling, set-up and running costs, and controlling costs. Williamson distinguishes two dimensions: the human dimensions and the environmental dimensions. The latter is concerned with the characteristics of the market in which a high market uncertainty raises the cost of procurement (Williamson, 1985; Malmgrem, 1961).
In procurement for specialized youth care the number of firms in the supply chain is high (complexity) and the predictability of events is low (dynamism), resulting in a high market uncertainty (Binnenlands bestuur, 2016). This research focuses only on the environmental conditions because those are mostly used in relation to procurement outsourcing. It is purposed that due to the presence of transaction cost and striving for efficiency in in the field of youth care, the procurement practices are varying per municipality.
TCE focuses on three environmental characteristics for transactions (Yang et al, 2012):
The specificity of assets needed for production; in which degree human, material and capital youth care inputs can be used for other purposes than intended. Since the need for special care is unpredictable and pluralistic assets can often not be re-used and economies of scale cannot be achieved. For example, the knowledge created about a resident and the agreement on need for certain care, represent an asset towards municipality and care provider in that region. This knowledge is not simply transferable to another child or to another care provider.
The frequency of transaction; how often the transaction is repeated. The second dimension that Williamson identifies is frequency and volume, which is the extent of buyer activity. In general, the more frequent municipalities and care providers have contact/appointments with each other, the more they will trust each other. As Limburg (2016) described there is much uncertainty in the procurement process: a lack of trust and cooperation between municipalities and care providers is becoming disastrous for innovative capacity in the care sector.
The degree of uncertainty of transactions; uncertainty, unpredictable or unanticipated events that interfere with the ability to fulfill the terms of the transaction. Sources of this uncertainty are multiple: market volatility, political changes and, most importantly in this case, the financial and operational status of the care provider. Since the decentralization has put quite some financial pressure on the care providers, there is high uncertainty in the transaction. In addition, the demand for specific youth care is hard to forecast and the demand and the supply chain consists of many organizations. These sources of uncertainty are out of municipal control and therefore can be of great influence on the procurement. Resulting in the following proposition.
19 3.5 Towards the conceptual model:
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Figure 4, Conceptual model
Efficiency factors
(TCE)
Legitimacy factors
(Isomorphism)
Coercive isomorphism -Rules/regulations -Norms/values Mimetic Isomorphism -Innovative municipalities -Regional municipalities -Neighbor municipalities Normative isomorphism -Professional groups -Committees Asset specificity -CustomizationFrequency of the transaction -Duration procurement contracts
-Contact with providers
Uncertainty of the transaction
21 4. METHODOLOGY
This chapter elaborates on the methodology of the research. The research method, the data collection & the data analysis method will be described. In addition, the controllability, reliability and validity of the research are discussed.
4.1 Method of data collection
This study aims to find an answer to the research question: “How do pressures from legitimacy and efficiency influence the public procurement within Dutch municipalities?”. Municipalities procuring for youth care is a recent development, therefore limited research has been done on the phenomenon. In order to provide direction, the conceptual model shows factors that influence the phenomenon, however it is unclear how. Since many services are procured under youth care, the focus of the research is on specialized youth care only. The specialized youth care services were chosen for two reasons. First, in early research it became clear that specialized youth care involves many uncertainties when it comes to both budgets and quality of care (NOS, 2017). Second, general youth care and preventive youth care were already municipal tasks before the decentralization and therefore less interesting to investigate. Through a qualitative study the answer to the research question is formed. A qualitative research is particularly useful when the study is approaching a field in which the goal is to gain understanding between concepts and the underlying reasons for the link between the concepts (Kohn, 1997). This study will explore on the effects isomorphism and transaction cost have on homogeneity in public procurement practices.
To assure replicability and controllability of the research a clear description of the research execution is provided (van Aken, Berend & Bij, 2012). The data is collected through in-depth interviews and by analyzing documents (secondary data) in order to control for instruments biases. A controllable research can be replicated by other researchers and also requires the results to be presented as precisely as possible (van Aken et al., 2012).
4.2 Interview method
22 4.3 Development of interview questions
For the development of the interview questions the conceptual model was used as a guide. All questions are directed towards procurement of specialized youth care. First some introductory questions and general questions about youth care reform and public procurement were asked. Then questions were asked regarding procurement, choice for the procurement model and the choice for the funding model. Subsequently, the relation of municipalities with central government, professional groups and other municipalities is questioned. And lastly, there is asked respectively after the degree of asset specificity, uncertainty and frequency of the transaction. The interview questions are shown in appendix A. Figure 5 provides the topic list.
Figure 5, Topic list
● Procurement - Procurement model - Funding method ● Legitimacy factors - Coercive isomorphism - Mimetic Isomorphism - Normative Isomorphism ● Efficiency factors - Asset specificity - Frequency of transaction - Uncertainty in transaction 4.4 Selection of respondents
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Care providers are not included in the research for several reasons. Firstly, because this research does not focus on the relationship between municipalities and care providers. Secondly, care providers deal with a different level of perceived uncertainty. Thirdly, care providers care providers are left out in order to increase generalizability of the results.
Figure 6, municipalities included in the study Participating
municipalities
Partnership Contract Managers Policy advisors
procurement
Hoogeveen Zuid-Drenthe x
Emmen Zuid-Drenthe x
Ede Foodvalley x
Apeldoorn Midden Ijssel/Oost veluwe
x
Ommen Ijsselland x x
Harderwijk Noord Veluwe x
Leeuwarden SDF x
4.4 Data analysis
24 Figure 7, internal documents
Documents used (PDF) Municipality Partnership
- ‘Inkoop jeugdhulp 2017- Zuid Drenthe’ - ‘Besluit tarieven Jeugdhulp Hoogeveen 2017’ - ‘Nadere regels Jeugdhulp gemeente Emmen 2017’
Hoogeveen Zuid-Drenthe Emmen Zuid-Drenthe - ‘Transformatie zorg voor jeugd FoodValley’
- ‘Plan van aanpak Zorg voor jeugd in FoodValley’
Ede Foodvalley
- ‘Aanbestedingsbeleid gemeente Apeldoorn’ - ‘Inkoopvoorwaarden van de gemeente Apeldoorn’
Apeldoorn MiddenIjssel/ Oost veluwe
- ‘BVO- jeugdzorg-Ijsseland’ Ommen Ijsselland
- ‘Inkoopvisie Jeugdhulp’
- ‘Koersmodel jeugdstelsel zorg voor jeugd’ - ‘Beleidskader 2015-2018 in ‘een keer goed’
Harderwijk Noord Veluwe
- ‘Financieel besluit jeugdhulp gemeente Leeuwarden 2017’ - ‘Inkoop- en Aanbestedingsbeleid Gemeente Leeuwarden
2014-2018’
25 5. RESULTS
This part of the research represents the results gained from eight interviews with policy advisors for procurement and contract managers. The results are organized per category; procurement, isomorphism and TCE. The category procurement helps establishing an image of how procurement practices look like within municipalities. And whether or not they show different or variable procurement practices. Regarding the other categories, questions were asked to access the presence of the attributes from isomorphism and TCE. Quotes of interviewees and tables are used to illustrate the findings.
5.1 Procurement
Municipalities were asked after the procurement process and about which specific model they use. In addition, two questions about the funding method and agreements with care providers were asked.
5.1.1 Procurement model
The following results occurred from the two questions about procurement. Most municipalities have chosen to use governmental procurement to provide a comprehensive youth care offer. In total, five municipalities and purchasing organizations have chosen to buy youth care through governmental procurement. In addition to governmental procurement, two municipalities have decided to buy youth assistance through flexible framework contracts, this corresponds best with the “Zeeuws” model. One investigated municipality has decided to develop and use a combination of purchasing models which he names: Government-oriented procurement. This method is a combination of governmental procurement and the Zeeuws model. According to the municipality of Apeldoorn: “We indicate on Tenderned which product or service we want to purchase” ...” In the end, we want to reach a Zeeuws model, but through the use of dialogue.”
Classical procurement, multiple private procurement, best value procurement and private auction were not used by care providers included in this study. Classical procurement is very transactional, care providers are in this case not allowed to discuss conditions with municipalities. Reason for this could be that those models do not allow for dialogue at all and this does not fit with the nature of youth care. “Due to complexity of youth care the need for some sort of relational contracting is high” municipality of Emmen.
5.1.2 Funding method
When accessing the funding method that municipalities use to pay the care providers, questions were asked about the agreements that were made with providers and there was specifically asked after the choice of funding method. The following results occur.
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are striving to strictly use the output oriented funding method from now on. Municipality of Ede: “We fund this way because we simply want to see if the results are achieved, and I think everyone should be using this approach despite of the changes it entails”. This method of funding requires some substantial changes in the processes from both municipalities and care providers and that forms a very real and fundamental barrier for municipalities. In addition, changing to the output oriented funding model can be threating for the liquidity position of care providers. In order to prevent care providers from going bankrupt in the transition to the output-related funding method, the municipalities will fund a small amount beforehand: “we just want to see a result and sometimes a small payment in advance will be made, for example 30 percent and in the end the other 70 percent” municipality of Leeuwarden. The municipality of Emmen and Hoogeveen think it is a better strategy to use a combination of task oriented funding method and the effort oriented funding method. They don’t use the output oriented method because they don’t think the output oriented funding method will be successful, since there is no sufficient instrument available to measure the output. The municipalities of Apeldoorn and Leeuwarden think a combination of output oriented funding and task oriented funding is the best because: “the output related funding does not provide added value for every care product“. One of the municipalities using a combination of funding methods, said that it was necessary to use a combination if they wanted to procure for youth care and Wmo together: “because we want to buy it together with the Wmo, we are dealing with a measure from the Wmo that has recently been announced; we cannot fund things as a result without justifying how many hours we schedule for it”. Wmo is the care for people from 18 years old. Reason for municipalities to procure youth care together with Wmo is to make the transition easier and because they believe it will improve the quality of the care when one budget is used for all resident’s independent of their age.
Summarizing, municipalities show differences in procurement for youth care. Different procurement models and funding methods are used, shown in table 8. Hence, for this research it means the concepts of isomorphism and TCE can be used to provide clarification about where the choices arise from. Figure 8, use of procurement model & funding method
Procurement model NM* Funding method NM*
Governmental procurement 5/8 Effort-oriented method 0/8 “Zeeuws” model 2/8 Task-oriented method 0/8 Classical procurement, multiple private procurement,
BVP and private auction
0/8 Output-oriented method 4/8 Combination of Governmental & “Zeeuws” model 1/8 Combination of task & effort-oriented 2/8 Combination effort & output-oriented 2/8
27 5.2 Isomorphism
Starting with the factors that according to the literature increase homogeneity in procurement practices. 5.2.1 Coercive isomorphism
The interviewees were asked questions about the role and power of the central government to find out how much pressure the central government extends on municipalities with respect to procurement. It appears that five out of eight interviewees do not experiences much pressure regarding procurement from the central government as an institution. Overall, the regulations of the new youth act are not to be found strict. Five people experience a lot of freedom to do things in their own way, while three interviewees feel moderate pressure to conform to the rules. "Having freedom to do it how you think is best, is a crucial aspect of the decentralizations" municipality of Hoogeveen. Interviewees describe that the freedom is necessary to appropriately fulfill the needs of the residents and the care providers in a particular region. According to municipality of Emmen: “Every region has its own history and that is determining for what procurement model or funding method fits best”.
However, there are some aspects of the role of the central government that do provide some pressure. For example, budgetary restrictions can be perceived as a pressure by municipalities. According to the policy advisor for procurement of municipality Leeuwarden: “we have to run a very big assignment as a municipality, but we also get less money”. All municipalities mention the budgets as a coercive pressure from the central government. They also describe the negative effects of the tight budgets: “There is a risk that you let the money lead, instead of looking at what does this young person really need” municipality of Leeuwarden.
The municipality of Ede describes that the central government pushes them to make long-term contracts with care providers: “I feel pressured from the government to enter into long-term contracts with certified institutions, central government says this is a legal task and must be implemented. It is not a problem because already have long-term contracts, but still”.
28 5.2.2 Mimetic isomorphism
Mimetic Isomorphism addresses how organizations deal with uncertainty. Several questions were asked to see whether interviewees look at the practices of other municipalities when they perceive some sort of uncertainty in procurement. Whereas profit organizations may be resistant to discuss their strategies, strengths and weaknesses with competitors in the field, this appears to be the opposite for municipalities. When asked how they deal with this in procurement for youth care, the interviewees stated that cooperation and discussion between municipalities is important at all times; at this moment as well as right after the decentralization. Examples are demonstrated in interview quotes. Municipality of Ommen for example said: "Youth care consists of a very complex demand and sometimes it is useful to speak to colleagues in the region". And the municipality of Ede: “in organizing procurement we looked at best practices of municipalities who share the same strategy and vision as we do”. Literally every interviewee is very positive about looking at the best practices of other municipality’s: “We are talking about care for people here, it’s better to copy best practices than to make n up bad practices yourself” municipality of Emmen.
Municipalities copy each other’s practices through both cooperation and discussion in case of uncertainty, just as the theory describes. They constantly observe what other municipalities do and copy those practices when they are in line with the vision and how they want to control: “when you know something is working in another place, why not copy it?” said by municipality of Ommen. It appears from the interviews that the municipality of Amsterdam and West-Brabant-West are leading in the field of youth care because many municipalities copy parts of these procurement strategies. From the interviews can be concluded that there is a strong presence of mimetic isomorphism.
5.2.3 Normative isomorphism
The interviewees were asked questions about the role and power of professional groups for youth care to find out how strong the role of professional groups is. As a result, the VNG, short for association of municipalities, seems to have the most provocative role according to municipalities. Followed by the NYI, netherlands youth institute, who has more of an advising role. All municipalities actively make use of the documents and blueprints the VNG provides as a guideline:” What we really need to take into account is indeed the advice of the VNG, but also what the subcommittee youth care publishes and what the i-social domain says. These are also the three things the state secretary is closely involved with" municipality of Apeldoorn. Through these media significant changes and developments are communicated that can greatly affect the municipality's policies.
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one municipality thinks the role of the VNG sometimes extends its responsibilities: “In my view, the role of the VNG is sometimes broader than what they are… when you are an interest group but at the same time also have a procurement role, it will be difficult because you play a double role”. Another municipalities states that as a procurer you can never take into account everything the professional groups, especially the VNG, recommend.
In addition to the national professional groups, municipalities attach value to the opinion of local groups: “local interest groups, and youth councils are also very important because they represent the opinion of the youth the best” municipality of Leeuwarden
5.2.4 Homogeneity in procurement due to isomorphism?
Proposition 1 describes that due to pressures from isomorphism the homogeneity of procurement practices will increase. There appears to be a weak form of coercive pressure. Hence, pressures from central government are not causing homogeneity, but there seems to be an incentive for freedom in procurement.
However, municipalities do copy each other’s practices when approaches from other municipalities seem effective and fit their strategy. In addition, homogeneity is increased because municipalities seem to attach value to the advice of professional groups, in particular the VNG. Aspects on which municipalities show similar approaches, for example due to coercive, normative or mimetic pressures are shown in table 9.
Figure 9, Overview of similarities due to isomorphism pressures
Subject Number of municipalities
Collaboration with regional municipalities 8/8 Social worker/neighborhood teams 8/8
Custom made care 8/8
Result oriented agreements (not funding) 8/8
No budget ceilings 8/8
30 5.3 Transaction cost economics
In this paragraph, the factors that according to the literature increase heterogeneity, will be described. 5.3.1 Asset specificity
To investigate the asset specificity in the transaction, questions were asked related to the level of custom made care and about combing procurement for youth care with Wmo; care for people from 18 years old. This is interesting because combining these two promises to increase the degree of customization per household. The following results occur.
All municipalities agree that customization in youth care is mostly provided at the operational level by professionals/social workers in the neighborhood or youth team. They must be able to find out what the client's situation is and then provide the correct care, or refer to it. When asked after what interviewees understand by custom made care, the answers correspond with the following statement from the municipality of Harderwijk: “Customized care means that we as municipalities need to provide adequate supply so that parents and young people can choose for assistance that matches their own identity”. And the municipality of Ede: “The custom solution describes that a provider must offer a combination of support and organization as a main contractor, whether alone or in combination with subcontractors”.
Customization in early stages is also used to prevent transfers to expensive specialized care. Municipality of Leeuwarden describes the following problem as a result of lack of customization: “The most expensive care referrals come from the family doctor… he thinks if it is not physical it must be something psychic but this doesn’t have to be the case”. The neighborhood teams, on the other hand, look more at what is the family situation. So, to solve this problem the municipality of Leeuwarden placed a social worker at the local doctors practice because the social worker is better able to access the living situation. Together with the medical knowledge of the family doctor they make a care plan or refer to the right form of care. This will both increase the quality of the care and decrease the expensive referral’s to GGZ services. The municipality of Ede is also doing this:
Regarding the question about combining youth care with Wmo. Six of the eight interviewees believe that it benefits the quality of care when the Wmo and youth care are purchased together: “In 2019 we will re-purchase again, together with the Wmo, social shelter and protected living. Will we do one integral purchasing” municipality of Apeldoorn. Four out of eight municipalities are actually planning on combining the procurement practices, the others are at first looking for more collaboration between the two, like municipality of Harderwijk and Ommen.
31 5.3.2 Uncertainty
To access the level of uncertainty, questions were asked to access the level of uncertainty in the transaction. There was asked after (1) what uncertainties municipalities experience in procurement for youth care, (2) knowledge of specialized care within the municipality, (3) if and how municipalities measure results.
Six interviewees experience uncertainty as a result of the complexity of youth care and because of the limited influence they have on the specialized care referral’s. Only two interviewees describe a moderate to light form of uncertainty. There appears to be a large number of topics on which people experience a certain degree of uncertainty, ranging from the limited influence and knowledge of youth care, to practical matters and whether they will cope with extra budget cuts for example. Figure 10 shows the uncertainty factors mentioned by the interviewees. As mentioned earlier all municipalities experience the budgetary cuts as an uncertainty. With regard to the funding method most municipalities want to use the output related funding method for procurement of specialized youth care because it improves the quality of the care. This new funding method can in some cases threaten the liquidity position of the care providers. Three out of eight municipalities mention this as an uncertainty.
Figure 10, uncertainties in procurement for specialized youth care
Uncertainty Number of municipalities
Budgetary cuts 8/8
Measuring results of care providers 5/8
Liquidity position of care providers 3/8
Residence principle (woonplaatsbeginsel) 3/8
Limited influence on specialized referrals 3/8
Changing role of district teams and family doctors 2/8
Sensitivity of topic/media activity 2/8
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In addition, three interviewees mention the residence principle as an uncertainty. The municipality of Ede describes the following problem regarding the residence principle:” If young people get a court custody then the region where that person is placed is responsible for their payment. Whereas many of those institutions happen to be in our region and that is risky and comes with uncertainty related to our budget for instance”. Municipality of Emmen also experience uncertainty regarding the residence principle. According to respondents this principle is a mistake in the youth act.
As described under ‘asset specificity’ the limited influence municipalities have on the referrals from child doctors and family doctors worries them and appears to result in unnecessary high cost: “Yes, I think there was something in the water here because we were the biggest referrer to the specialized ggz institutions. Then the entire ggz screened all the applications and the results showed that 25% actually does not belong to the specialized ggz but belongs to basis ggz.” According to the municipality of Ede. Municipalities try to increase their influence on those referrals by supporting cooperation within the care chain and by providing education and extra information. According to the municipality of Leeuwarden: “We still have some bottlenecks with the referrals from the area teams and the family doctors. We are asking a different approach from them, and therefore we are now providing them with education and information.”
Finally, two interviewees experience uncertainty because of the media activity on the topic of youth care in the Netherlands. According to municipality of Apeldoorn and Leeuwarden: “you have to look for the best way, but it does not work out the media finds it very interesting to report”. It is a sensitive topic on which it is easy to criticize.
Hence, from figure 10 and the description given above it becomes clear that there are multiple uncertainties in the transaction for youth care.
5.3.3 Frequency of transaction
To determine whether or net asset specificity is high, interviewees were asked how many times they have contact with care providers and in which manner. And they were asked after the different product and if they make certain agreements with care providers related to minimum/maximum amount of purchases.
33 procurement takes place once per 2 years.
Regarding to the agreements for minimum/maximum purchases, it appears that none of municipalities makes such agreements with care providers anymore. According to municipality of Hoogeveen: “the budget ceilings have been released, so now it are all zero agreements and window contracts that are completed as the inflow progresses”.
Frequency of contact municipalities have with care providers depends strongly on the strategy of the municipality and which relationship they want to have with the care providers. Municipalities that want to create space for adjustments and dialogue in the transaction, followed the governmental procurement model. With the Zeeuws model this is much less the case; the Zeeuws model does not have room for dialogue or substantial changes submitted by care providers. Therefore, can be said that the municipalities using the governmental procurement model most frequently have contact with the care providers, but on the other hand when using the Zeeuws model for example the frequency of contact with the providers is much lower.
From this information can be said that the overall the frequency of the transaction in procurement for youth care is low.
5.3.4 Heterogeneity in procurement due to presence of transaction cost
Proposition 2 describes that due to the presence of transaction cost, the heterogeneity of procurement practices will increase. The frequency of the transaction and number of appointments, appear to be low in procurement for youth care. In addition, municipalities also experience high uncertainty and the asset specificity is high due to the increasing demand for custom made care per family. So, the pressures from TCE are present and the literature describes that due to the presence of transaction cost, the homogeneity of procurement will decrease.
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Figure 11, Reasons for heterogeneity in procurement for specialized youth care
Reason for variances Key word NM*
Differences in the College, the city council and the vison of the alderman.
Political ideologies 5/8
Differences in the history of the region and the relation with providers.
Regional history 3/8
The ongoing deliberations between financial resources and the actual content.
Financial pressure 1/8
Due to lack of control in combination with the amount of money that is needed in youth care
Lack of control 1/8
*Number of municipalities
The answers between municipalities differed quite a lot. Five out of eight municipalities stated that at least some form of political influence played a role in differences in policy making. Municipality of Ede: “I think that is much more bound to the College that is in the municipality. As a municipality, you are very dependent on the College and also the city council. And you are also depended on what the alderman does.” The municipality of Ommen had a more nuanced approach about that it is more about differences in strategy:” It depends on your strategy and the way you want to monitor. Look, we have deliberately chosen to do it all along with providers because they know very well how to achieve quality. But everyone chooses very consciously, some choose very consciously for effort-based funding, for example”.
Three out of eight municipalities were convinced that every region has some sort of own history with, resident and care providers and that this is the most influential reason for the variances:” differences also arise because you have to take into account where you come from, the history of the region and the providers” municipality of Hoogeveen. This is supported by the statement of the contract manager of Ommen: “It all depends on how you want to control, how much trust you have in the providers, the usual purchasing structure and how did it go in the past.”
The municipality of Leeuwarden describes financial pressures are the main cause of the variances. He describes that municipality continuously have to look for the right balance between financial resources and the actual care content: “municipalities are really looking at how can we stay within the budget and how do we put direction and grip on healthcare providers without putting too much pressure on them so they stay innovative”. This is in line with the opinion of the policy advisor of Ommen: “youth care is very complex and municipalities are looking for their own way to get a grip on the situation”.
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but local differences occur due to differences in the environment of the region and due to different ways of dealing with lack of control and financial pressures.
6.
DISCUSSION/CONCLUSIONThe center of the conceptual model is formed by the level of homogeneity in procurement for specialized youth care by municipalities. The results show that in the basis municipalities do indeed procure in similar ways. However, differences are strongly visible ranging from the procurement model to how certain things are monitored and on which subject’s municipalities put an emphasis. The municipalities are all aware of the benefits of the governmental procurement method because it allows for dialogue with care providers. But not all municipalities believe that this is the most efficient method, this is demonstrated in the fact that municipalities are still using other models, like the “Zeeuws” model or a combination of models. The municipalities are also aware of the trend that came up in recent years to use the output-related funding method. Except not all municipalities seem to believe that it is a realistic method to use because it often appears hard to measure the results.
6.1 Answering the research question
The aim of this research was to answer the following research question: How do pressures from efficiency and legitimacy influence public procurement within municipalities? The results show that isomorphism influences municipalities to adapt a similar procurement groundwork of norms, values, and guidelines as other municipalities. The isomorphic mechanisms used to access homogeneity between municipalities originated from DiMaggio and Powell (1983), namely coercive, normative and mimetic isomorphism. The results show that municipalities clearly feel the pressures of normative isomorphism and that the uncertainty in the youth care field is so high that clear examples of mimetic isomorphism through the copying of other municipalities are shown. However, the coercive mechanism was not found to be strongly present. Furthermore, the left part of the conceptual model dealt with pressures from TCE mechanisms from the work of Williamson (1999). These pressures are leading to a decrease in homogeneity in procurement practices. It was shown that transactional features such as uncertainty, low frequency of the transaction and asset specificity were found to be present in procurement for specialized youth care. It can be concluded that legitimacy and efficiency factors are both present in the case of procurement for specialized youth care, but influence public procurement in a different way.
36 6.2 Comparison of findings with academic literature
This discussion involves a comparison of this study’s results with results from previous studies. As was explained above, variations as well as similarities are to be seen between municipalities in how they procure for specialized youth care.
Homogeneity due to isomorphism
The result, that municipalities procure similarly, is supported by the research of Kondra & Hurst (2009, p 53) describing that “embedded in values, ideas, underlying assumptions or normative practices appear to be the hardest to discern and overcome due to their taken for grantedness”. In addition, Frumkin, & Gelaskiewicz (2004) found that the amount of legitimacy is higher for public organizations then private organization. Governmental organizations are vulnerable to institutional or legitimizing influences because of their lack of accountability for performance indicators such as sales and profits, according to Frumkin & Gelaskiewicz (2004).
It is interesting that coercive isomorphism cannot be detected based on the results of this research. Logically, it should have been detected because when implementing public procurement, municipalities get involved with for instance the European Directives on procurement and with the new Youth act (Eshien, Staropoli & Yvrande-Billon, 2014) but also with certain norms and values from the central government. The result that coercive isomorphism does not exist in this setting could perhaps be explained by the following characteristic of the decentralization: “the government wants to bring youth assistance closer to the citizens to get a better idea of what is needed in the region” (NYI, 2016). Being strict does simply not fit the goals of the decentralization, it will even limit the local decision making and therewith the value of the decentralization. This is in line with the opinion of the respondents; municipalities believe that this lack of pressure promotes the quality of the youth care.
It is consistent with literature that because there is high uncertainty in procurement transaction, municipalities mimic each other. Municipalities explain that they look at the policies of neighbor-, regional or innovative municipalities to come up with ideas for their own policies. Municipalities inspire their procurement practices on the best practices of other municipalities. This is supported by the research of Frumkin & Galaskiewicz (2004) who say that organizations particularly imitate the procedures and solutions when the uncertainty in the field is high.
