How to Assess Administrative Reform? Investigating the Adoption and Preliminary Impacts of the Norwegian Welfare Administration Reform

doi: 10.1111/j.1467-9299.2010.01809.x

HOW TO ASSESS ADMINISTRATIVE REFORM?INVESTIGATING THE ADOPTION AND PRELIMINARYIMPACTS OF THE NORWEGIAN WELFAREADMINISTRATION REFORM

JOSTEIN ASKIM, TOM CHRISTENSEN, ANNE LISE FIMREITE AND PER LÆGREID

This article addresses how to assess public-sector reforms using a reform in the Norwegianwelfare administration as a case study. This reform represents a complex hybrid organizationalform and a challenging combination of political control and local autonomy. We examine firsthow the reform has addressed its three main goals. These were to get people off welfare andback into work, to bring about more service-orientation, and to increase efficiency. We alsoaddress the side-effects of the reform by describing operational effects, process effects and systemeffects. Second, we examine how effects can be understood from an instrumental, cultural, andenvironmental perspective. A main finding is that context is significant for effects, and that it has sofar proven difficult to discern clear overall effects concerning the main goals of the reforms and theirside-effects.

INTRODUCTION

In many countries, pressure to increase the capacity and efficiency of governance has ledto efforts to improve cooperation and coordination between different levels of government(Halligan 2007). While central government would like to exert more control over localactivities and services and to standardize them, local government would prefer to enhanceits autonomy. What now seems to be emerging is a new type of hybrid public organizationin which local autonomy and central control are being enhanced simultaneously througha mixture of NPM and post-NPM measures (Christensen et al. 2007). This article addressesthe question of how to investigate the adoption and impact of the reform, in Norway, of thewelfare administration, an administration which is emerging as a hybrid organizationalform of this kind. The reform – named the ‘Nav’ reform – is a merger of the centrallycontrolled employment and national insurance administrations into a new employmentand welfare administration. At the local level the new merged administration will formallycollaborate with social services, which have always been administered locally. The threemain goals of the Nav reform are to get clients off welfare and into work, to create a moreefficient administrative apparatus, and to make the administration more service-oriented.

Hard evidence of reform effects is scarce, since the reform at the time of writing has notyet completed its implementation process, set to run through 2010. We use the welfareadministration reform as a basis to engage in a theoretical discussion of how its relativesuccess or failure might be assessed as implementation progresses.

We start by giving a brief description of the Nav reform and its implementation.We then outline existing theories on how to measure and categorize the effects ofadministrative reform. Using different theoretical perspectives, we formulate hypotheses.We then describe and analyse the reform’s preliminary effects on the three main goals ofgetting people off welfare and back into work, bringing about more service-orientation

Per Lægreid and Anne Lise Fimreite are Professors at the Department of Administration and Organization Theory,University of Bergen. Tom Christensen is Professor at the Department of Political Science, University of Oslo. JosteinAskim is senior manager at PricewaterhouseCoopers.

Public Administration Vol. 88, No. 1, 2010 (232–246)© 2010 Blackwell Publishing Ltd

NORWEGIAN WELFARE ADMINISTRATION REFORM 233

and increasing efficiency. In addition, we discuss whether the reform has produced ormight produce side-effects. The article concludes with some more analytical insights.

Our empirical data are taken from interviews with 43 central actors in Norwegianministries, parliament and central agencies, as well as with other stakeholders, conductedby the authors between September 2007 and February 2008. Interview data are sup-plemented with survey data from a preliminary evaluation of reform implementationat the local level (Andreassen et al. 2007). In our analysis of possible reform effects wediscuss the data in the context of extant research from earlier studies of comparablereorganizations.

NAV WELFARE REFORM IN BRIEF

In the Norwegian welfare state, functionally divided sectors have traditionally beenan important mechanism for coordination between different levels. The Nav reform isintended to meet the challenges of both strong sectors and multi-level governance byformally integrating services that are in some cases central government responsibilitiesand in others the responsibility of local government. In 2005, the Storting (the Norwegianparliament) merged the administrations of insurance and employment. It also stipulatedthat the autonomy and tasks of local government should not be altered, which impliedthat the social services administration was to remain a local government responsibility.A joint front-line service was to be created in each municipality, bringing together themerged employment and insurance administrations and the social services administration.The partnership model was introduced as a solution that could help achieve the threemain goals of the Nav reform without upsetting the balance between local and centralgovernment responsibilities and autonomy (Fimreite and Lægreid 2009).

The introduction of the partnership model was an organizational innovation in theNorwegian political-administrative system. It aimed to combine the principle of ministe-rial responsibility and a strong functional specialization on the one hand and the principleof local self-government and territorial specialization on the other. It was promoted asthe missing link between local self-government and ministerial responsibility. The modelwas intended to create joint operative solutions with two owners – the municipalitiesand the parent ministry – through the new government agency. The solutions imply dualaccountability relationships – upwards within the sector to central government, but alsoto the local government authorities.

There is a trade-off in the partnership arrangements between central government’sneed for standardization and local government’s need for local adaptation and flexibility.The partnership arrangements therefore avoid too much detailed top-down steering andallow for local flexibility, thereby making them more legitimate locally. Both coordinationbetween the different administrations at local level and the one-stop shop idea representchallenges for administrations/services and government levels accustomed to territorialas well as cultural distance.

The reform affects around 20,000 public employees in agencies and municipalities.The services provided under the Nav cost about 30 billion euros annually (one-thirdof the state budget) and serve about half the Norwegian population. Around 700,000people of working age are either wholly or partially out of work at any given time. Aninterim organization was set up in 2005 to prepare the formal establishment of the newemployment and welfare organization on 1 July 2006. The plan is that the front-line service


234 JOSTEIN ASKIM ET AL.

units, based on the local partnership agreements, will be in place in all 430 municipalitiesby the end of 2010; so far (December 2009) about 400 have been established.

There seems generally to be strong loyalty to the reform, and actors at different levelsare trying to implement it in line with the reform principles laid down. At the centrallevel, the reform created a traditional ministry-agency relationship. Merging the centralparts of the employment and pension administrations seems to have run more smoothlythan establishing the local welfare offices.

At the local level, 93 per cent of the Nav offices established so far have unitarymanagement. There are substantial variations in what tasks the municipalities includein the partnership (Monkerud 2008). For services included in the partnership, it isobligatory for them to be co-located. At the regional level, administrative units withspecial competencies have been established. These units handle services defined asindividual rights, primarily concerning pensions. It is estimated that around 80 per centof all Nav tasks are tasks of that sort.

Even if it is too early to measure most effects of the reform directly we argue that it isstill valuable to discuss the implementation of the reform and some preliminary effects,as well as potential effects and implications. It is important to discuss the intended andexpected effects on main goals as well as possible unexpected side effects, primarily seenfrom the central level. We proceed by offering a theoretical approach that makes thispossible.

THE THEORETICAL APPROACH

Categorizing effectsThere seems to be an overall tendency in the reform literature to infer too easily fromintentions and goals to effects (Christensen and Lægreid 2001; Pollitt and Bouckaert2004; Christensen et al. 2007). The instrumental assumption that effects will correspondwith stated goals of political and administrative executives must therefore be challenged.The goals of reforms and their underlying means-ends theory are often ambiguous;in addition, reforms are often modified during their implementation. In a political-administrative system such as the Norwegian one, with a collaborative decision-makingstyle and consensus-oriented political-administrative culture, divergent normative andpolitical criteria often cause actors to seek compromises. This in turn contributes to goalsbecoming ambiguous and partly conflicting. This is not necessarily a sign of weakness butcan be interpreted as characteristic of a democratic mode of steering in a pluralistic society.Often goals are deliberately unclear even when they are presented as clear (Christensenand Lægreid 2003). But it is obvious that unclear and partly conflicting goals will make itmore difficult to measure reform effects.

There is also the problem of timing. As time passes, the probability of revealinglasting effects increases, but so too does the difficulty of isolating the effects of a specificorganizational reform initiative from other reforms and changes that have occurredconcurrently or in the meantime. This leads us to a methodological problem of effectmeasurement, namely, the problem of attribution (Pollitt 1995). Effect can be a slipperyconcept (Pollitt and Bouckaert 2004, p. 103). A distinction is often made between a narrowand an expanded concept of effects, and we emphasize both empirically. A narrow conceptof effects focuses on intended or desired effects. A broad concept of effects will focus ondysfunctions, side-effects and societal and political effects, such as effects on political-democratic steering relations, trust, legitimacy and conflict patterns (Christensen et al.



2007). In situations where the extended effects concept is deployed, uncertainty andambiguity over effects grow, and interpreting how public-sector reforms function becomesall the more important (Hesse et al. 2000).

In this article, we use Pollitt and Bouckaert’s (2004) classification of effects into threecategories:

1. Operational effects: includes input effects on savings, efficiency and productivity;output effects on activity; and outcome effects on societal consequences and impactsfor users and clients.

2. Process effects: includes effects on service quality and processing time, on customerand client satisfaction, on performance orientation and on responsiveness and user-friendliness, but also shifts in administrative culture and changes in staff motivation,satisfaction and cognitive frames.

3. System effects: by this we mean effects on the capacity of the political-administrativesystem, such as structural changes in system interaction and communication, capacitybuilding, changes in political control, steering capacity, coordination, accountability,legitimacy, trust in the system and power relations.

These effects are interconnected. The three main goals of the Nav reform can be assignedto two of the categories: efficiency and getting people off welfare and into work areoperational effects related to input, output and outcome, while service-orientation is aprocess effect. In addition, side-effects and dysfunctions can also be classified according tothese categories. While process effects have a more internal focus, system effects addresshow the reform affects the broader political-administrative system.

Understanding effectsWe have so far presented a theoretical framework that makes it possible to categorize theeffects of administrative reform. Our intention, however, is not just to describe effects butto explain why these effects take place. For this we need theoretical perspectives that helpus understand how reforms are implemented and with what effects.

From an ‘instrumental perspective’ one would expect reform implementation andeffects to be influenced by changing organizational forms or structures, as well as bydemography and physical structure (Egeberg 2003). Ideally there is a tight connectionbetween reform visions, goals, programmes, initiatives, organizational forms, implemen-tation and effects. Effect measurement and evaluation may show whether organizationalforms and initiatives function as planned and point out possible weaknesses that needto be corrected. A key expectation is that formal structures will influence and channelattitudes and actions (Simon 1957), so when the formal structure is changed, models ofthought and actions will change accordingly. Moreover, it is assumed that leaders willhave adequate information about the effects of organizational redesign; they are supposedto score high not only on political-administrative control but also on rational calculation(Dahl and Lindblom 1953). Reform agents have the power to implement reforms andare well informed about means-end relations. One hypothesis based on the structural-instrumental perspective is that there is a tight coupling between the official goals of thereform and the observed effects.

H1: The Nav reform will produce positive effects on the main goals and will have nonegative side-effects on other goals and values.



An instrumental perspective might also consider ‘negotiative features’, because thereare mixed structural solutions, as well as heterogeneity and different interests. Evaluationand effect measurement could be used as political ammunition in a power strugglebetween different actors and groups (Cyert and March 1963; March and Olsen 1983).Information is seldom neutral. Interests, values and trust relations influence interpreta-tions of what is considered important and reliable knowledge. There will therefore beantagonisms and conflicts over a public organization’s knowledge-base, particularly if itis heterogeneous or finds itself in a heterogeneous environment. Compromises may beworked out concerning new structural solutions, making it less clear what to expect ofeffects but potentially increasing support for a reform or reorganization (Mosher 1967).The negotiative variant of the instrumental perspective would lead us to expect the goalsto be compromises between different, partly competing goals, which is what the newstructural solutions are, and to expect negotiating and compromises to continue into theimplementation and adaptation phase. If the power of the stakeholders and their abilityto build winning coalitions changes in the implementation phase one would also expectthe prioritizing of the different goals to change accordingly.

H2: The reform will produce mixed results concerning main goals and side-effects, andthere will be contrasting interpretations of the effects.

From a ‘cultural perspective’, decisions to introduce new structures or initiatives mayencounter rejection, resistance or sluggish implementation because they are on a collisioncourse with informal norms – that is, understandings and traditions that have longdominated an organization (see Selznick 1957). Effects will therefore potentially not beobtained, and decisions will be loosely coupled with effects. The reform has to pass acompatibility test (Brunsson and Olsen 1993), implying that reform elements that areat odds with existing administrative cultures and traditions may easily be rejected; andthere might also be path-dependencies, making it difficult to leave the paths of practices,procedures and organizational structures developed over time (Krasner 1988). A partialand pragmatic implementation of reforms may also result from cultural resistance.From a cultural perspective, one would expect conflicting organizational and professionalcultures to affect the implementation and adaptation process and produce obstacles toeffective goal fulfilment.

H3: The reform goals will be achieved to the extent that, a) they are in accordance withthe historical traditions and cultural norms and values of the involved services, and b)cross-cultural collaboration and integration is enhanced by the reform.

An ‘environmental perspective’ divides the environment of public organizations intotwo: the technical environment and the institutional environment (Meyer and Rowan1977). The technical environment often refers to actors in the environment that anorganization has close relations with and on whom it is dependent for obtaining resources,for decision-making, and for the provision of services. Major changes in such relations,or any more general kind of crisis in the technical environment, such as an economiccrisis, may result in reform (Aberbach and Christensen 2001). Based on this perspectiveone might expect that an economic situation with low unemployment would facilitate thereform while recession would constrain reform efforts and make it more difficult to fulfilthe reform goals.



H4: It will be easier to fulfil the goal of getting people from welfare to work in aneconomic boom situation with high demand for labour but more difficult to increaseefficiency.

The institutional environment concerns reform trends, myths and fashions in the envi-ronment that influence internal reforms (Røvik 2002). The emphasis is more on usingevaluation and result measurement for the purpose of legitimacy, but it is also aboutshaping and changing people’s attitudes and impressions. If there is broad consensus inthe environment on the best form of organization, it may be unnecessary to examine theeffects of alternative organizational forms. Decisions about reforms and their implemen-tation might be decoupled from practice and action. In such situations evaluations willoften have a symbolic function. Based on this reform one would expect there to be a loosecoupling between the reform itself and the practice of the reformed agency and betweentalk and action. It is easier to change the formal structure and make decisions that changethe day-to-day work of the welfare administration.

H5: The welfare reform will produce changes in formal structure and in the way theagency presents itself but not in the core activities and practice, and will therefore notfulfil major instrumental goals.

Based on this theoretical discussion we will use the case of the Nav reform, whichhas been designed to achieve a particular outcome but which is now approaching itsfinal implementation, to discuss some preliminary short-term results that can be observedin the implementation phase, as the municipalities gradually unfold the reform. It is,however, important to underline that the data at this stage are insufficient to fully test theformulated hypotheses.

MEASURING EFFECTS OF THE NAV REFORM

Operational effectsAdvocates for Nav reform are hoping for an efficiency gain brought about by the economy-of-scale effects of the main merger of sector organizations and by the specialization andstreamlining of tasks. But the goal of increased cost-efficiency seems so far to have receivedless attention than the other two main goals. This probably reflects the Norwegian traditionof relatively weak focus on redundancies when major public reforms are implemented,a principle that was also adhered to in this reform. The Ministry of Labour and SocialAffairs decided in 2005 that: (1) no one employed in the labour or pensions administrationsprior to 2006 should lose their job as a result of the Nav reform; (2) there should be aone-stop Nav office in each municipality; and (3) that each office should have at leastthree employees.

The establishment of new administrative units for pensions and other specialized back-office tasks was partly based on efficiency arguments. Agency representatives were veryclear about efficiency problems associated with the original partnership model:

The partnership model and the respect for local autonomy lead us to constantly makeinefficient decisions. (Interview with agency representative)

Some respondents claim that these units have already realized efficiency gains; otherssay they have so far devoted more attention to moving personnel, merging cultures anddeveloping services than to increasing efficiency. In addition, the problem of ambiguousresponsibility lines, a lack of unified steering relations, unclear interfaces between agencies



and organizations at different levels, and a generally rather complicated administrativemodel, may mean that efficiency gains are less evident than those expected or promisedby the reform agents.

Regarding another goal of the reform – getting people off welfare and into work – itis also difficult to identify any clear effects as yet. An important part of the Nav reform isto bring into the workforce people who are in marginal employment situations but whohave a realistic possibility of getting a job if they get adequate support from the Nav.According to a centrally placed respondent, if the Nav is not able to make a differencefor such groups, the reform will have been a failure. There is a strong expectation amongexecutives in the welfare apparatus that the Nav should be able to bring some of the340,000 on disability benefits and some of the 42,000 unemployed back to work. Given thatNorway has been experiencing an economic boom with very low unemployment for someyears, the conditions are optimal for achieving this goal. The country actually has a labourshortage in some sectors, so bringing more people into the workforce is highly desirable.This must also to be taken into consideration when the effects are finally evaluated.Without a booming economy and a low unemployment rate it would probably have beendifficult to implement Nav reform at all. So if one wishes to study the effects of the reform,there is an obvious attribution problem. In the present situation, with a down-turn inNorway and a looming increase in unemployment, the new welfare apparatus will face acritical test.

Process effectsEarly on in the process, the Storting focused on increased coordination, service-orientationand a ‘one-door’ policy. One major question here is whether the reorganization is overlygeared to coping with the 15 per cent of the users who are multi-service users. Whilethese users are indeed likely to be better off with a coordinated structure, the outcomeof the merger for the remaining 85 per cent who normally use only one of the originalservices may be somewhat more challenging. For these users the merger could createmore complexity and confusion and hence potentially a poorer service. Thus, the newadministration is likely to have a highly differentiated internal structure or it may evenreorganize itself further, as seen with the new regional pension units and an upcomingreorganization of the central agency. One can hope for ‘smart practice’ and seamlessinternal collaboration, but there is obviously a concern that operations may not run quiteso smoothly (Christensen et al. 2007). As one informant put it:

This is all about organization and attitudes. If we cannot make the specialized unitsrealize that they need to keep their hands off certain things, then the [autonomy of thepartnered] office will depend upon whether the leader of the specialized unit gets upon the right or the wrong side of bed each day. (Interview with agency representative)

A key indicator of fulfilment of the goal of increased service-orientation is how well localone-stop shops function. There has been no significant change in customer satisfactionso far (Andreassen et al. 2007), something that may be interpreted positively, given thepotential turmoil in the first post-reform phase. Generally, our respondents at centrallevel thought the new organization was more service-oriented. There have, however,been some critical media reports concerning this aspect of the reform. Challenges includedeveloping control measures and incentives to further local collaboration between thetwo forms of services, establishing participation channels for users locally, and balancing



the simplified procedure for applying for services and assistance against the actual resultsof these applications.

A further process-related issue is the establishment of the new regional administrativeunits for pensions and other specialized tasks. This might be seen as a re-specializationin the sense that process is being introduced as a specialization principle in additionto geography and sector. The idea is that these regional units will process cases in amore just, consistent and standardized way than would the local Nav offices. For theuser-friendliness goal, it is crucial that the interface between local offices and the regionalback-office units works smoothly. If transactions between these levels are slow, users willexperience annoying delays in case processing and the Nav reform will be perceived tohave worsened user-friendliness.

A process-related challenge mentioned by many actors is the cultural one. How easyis it to merge a judicial insurance culture designed to deal with individual cases in aroutine, rule-based way with a modernized employment culture embracing a broaderrange of social science competencies and more complex problems, and then to expect thismerged entity to cooperate with a local social services culture based on local knowledgeand a client-oriented discretionary approach? Employees from the three different motherorganizations belong to different welfare professions and they have different opinionsabout which problems are relevant and which solutions are appropriate. This may causeproblems of trust between employees at the local offices. As one informant said:

Culturally, state agency representatives had a kind of big brother arrogance towardsthe municipalities. (Interview with ministry representative)

Preliminary findings seem to indicate that local professional cooperation is going ratherwell, particularly in small offices. Local welfare offices in large municipalities, however,are struggling more, probably because they have experienced an internal structural andcultural fragmentation (Andreassen et al. 2007).

To develop a new Nav identity as a process of institutionalization will, however, taketime, and so far the indications that this is happening are relatively weak. Training is anissue here and the issue of competence is still a big challenge. Indeed, competence seemsto have received relatively little attention in the implementation process. In some units,competence seems to be both fragmented and fragile, and there is a need for more commonmethodologies, working methods and ways of thinking. The idea is that much of this canbe achieved through on-the-job training.

System effectsOne question to be raised is whether this new administrative apparatus is likely toincrease political control over the administrations and services involved, or whetherit will instead increase institutional and professional autonomy. The preconditions formore central political control are certainly there. First, the Ministry of Labour andSocial Inclusion has overall responsibility for the services involved, which means thatco-ordination is easier than if the services had been divided among several ministries.Second, the two merged administrations are centrally based, while the social servicesare locally based, which would potentially give the central apparatus the upper hand,particularly if the Nav agency is closely controlled or monitored by the parent ministry,as indicated by many respondents. Third, the services being merged have differentstructures, professions and cultures to cope with, something which does not point in thedirection of increased institutional and professional autonomy or strength. But if local



cooperation and standardization eventually emerge this will act as a counterweight tocentral control.

When it comes to vertical accountability, the relationship between the ministry and thecentral Nav agency is of great importance. The organizational solution is a traditionalministry-agency relationship, where there is a balance between control and autonomy.The ministry should control the agency at arm’s length. In practice, however, the ministryhas not only been involved in strategic issues, but also in individual cases and smallissues, so there has been more control over detail than originally planned. There are manydifferent tools and channels, both formal and informal, for steering and control, and thereare a lot of steering signals both of a general and more specific nature. Not only theministry itself, but also the Storting and the National Audit Office, are developing controlroutines and practices regarding Nav.

Horizontal coordination at different levels also has an impact on administrative account-ability. Horizontal intra-ministerial coordination between the Nav agency and otherareas of the ministry is no exception to this and this area seems to be a challengingone. Also challenging is the inter-ministerial coordination between the employment andwelfare administrations and other related policy areas such as health. Whether the dif-ferent levels of the Nav agency will manage to coordinate employment and insuranceservices as planned is also an important question.

There are also internal challenges in the Nav agency concerning steering and control.A main idea was to have a rather small and strategic central agency and to establish alarge, internal development unit with special responsibilities, the NDU, operating semi-autonomously, which would be run according to an NPM-inspired purchaser-providermodel as a kind of ‘agency within an agency’. This development from a cooperationmodel to a purchaser model has, however, been rather difficult to implement, and therehave been management problems and unclear responsibility relations at the interfacebetween the central Nav agency and its own semi-independent sub-agency, producingsome frustration in the NDU. As one informant said:

[NDU] has become a kind of scapegoat. [When something in the Nav is wrong]everybody says the NDU does not deliver. . . . Dodging responsibility happens in themodel we have constructed, because [the directorate and NDU] have different lines ofauthority. They say ‘this is not my responsibility’. (Interview with NDU representative)

One great concern is that the local partnerships in practice will not be between equalpartners and that the representatives from the former employment and insurance admin-istrations will act as ‘big brother’ in their new and powerful central agency role. It ishard to fulfil the ambition of creating partnerships where the partners are truly equal,even though most of the respondents on the central level emphasize that they wish todo so. But respondents at the local level are still afraid that the merged central agencywill dominate the local partnerships. They have, for example, reported that the centrallevel is too involved in detailed questions at the local level (Andreassen et al. 2007). Onereason for this is that top-down steering has been rather firm. Respondents report thatthe central agency has been too dominant and that this has reduced local autonomyand self-governance. Experience so far has shown that it is difficult to establish holistic,integrated and seamless services based on partnerships at the local level (Haugli Nyhusand Thorsen 2007), since the dual hierarchies are still very much present. A study of thefirst 25 pilot offices indicates that the partnership model is perceived as challenging fromthe local level (Andreassen et al. 2007). Achieving a balance between top-down steering,



demands, negotiations, dialogue and mutual cooperation both with the municipalitiesand with external bodies is tricky.

Among central civil servants, there is a wish for more standardization in relations withlocal offices. Many respondents report that aspects of the partnership model are an obstacleto efficient implementation of the Nav reform. The fact is that the partnership had to startoperating in a situation where the central government and the municipalities had differentbudget systems, co-determination systems, working conditions, wage agreements andpersonnel management systems, and where they worked according to different lawsand rules, even though strong efforts have been undertaken to make them more equal,standardized and compatible. This situation has produced management problems aswell as conflicts and tensions both between the different labour unions and between civilservice unions and government employers. So reform implementation has interacted withthe daily practice of the new welfare administration.

Accountability is a central concern in a political-administrative structure that is basedon a representative democracy. A central question is therefore whether the Nav reformwith its partnership model will make accountability unambiguous and transparent orwhether it will instead produce an ‘accountability deficit’. How can one have joint action,common standards and shared systems, on the one hand, and vertical accountabilityfor individual agency performance on the other? The partnership model tends not toclarify lines of accountability. The challenge is to achieve a better balance between verticalaccountability to the central level, accountability to local authorities, and responsivenessto users (Christensen and Lægreid 2007). A substantial dilemma is how to enhance verticalaccountability and control within the welfare state administration at the same time assustaining the autonomy of local government in this policy area.

THE REFORM PERSPECTIVES REVISITED

From an instrumental perspective, we assess reform effects vis-a-vis the reform’s structuralcontext. Early in the reform process, there was a clear request from the Storting to mergethe employment, national insurance and social service administrations into one welfareapparatus. A merger was supposed to produce a more efficient, holistic and user-friendlywelfare apparatus and as a result to bring more people into the workforce. The Stortingdid not have a particularly clear idea of how to obtain the desired effects; its organizationalthinking therefore was fairly general. For several years the government resisted a mergerand it eventually came up with a compromise, namely, a partial merger. This compromiseproduced a complicated structural context for the attainment of reform goals.

If we look at the Nav reform structure at the central level, what speaks in favour of thenew structural context delivering on the three main goals of the reform, as indicated inhypothesis 1? First, there may be efficiency gains in the central merger of the two sectoradministrations, potentially yielding a more streamlined and more smoothly run welfareadministration apparatus. In addition, ministerial mergers eventually established theMinistry of Labour and Social Inclusion as the body holding central political responsibilityfor all the three sectoral administrations involved. In terms of the efficiency goal, however,the lack of focus in the reform, the complicated structure, and the job guarantee foremployees, seem overall to indicate negative effects. The second question is how thecentral organization of the reform will create more jobs or get people who receive pensionsor welfare benefits into the workforce, a main focus of the executive during the reformprocess. One can argue that the mergers at the ministerial and agency level will create



more homogeneity, capacity and direction as a precondition for more concerted efforts.The real test of this could now emerge if Norway enters a more problematic economicperiod with high unemployment. It is therefore difficult to draw any conclusions aboutthe reform’s structural effects on employment.

Third, it is also difficult to see how central structural changes will increase user-friendliness. The only argument might be that the central merger is a preconditionfor local coordination, and that the reform has caused the central level to focus onlocal partnerships and one-stop shops. As experience with one-stop shops in othercountries seems to indicate (Halligan 2004), coordinated services may well increaseuser-friendliness, but this could be counteracted by increased local complexity.

There are powerful negotiation features in the reform process, something that isreflected in the effects and implications. The main organizational solution of the reform,and particularly the actual local organizational framing of the reform, can primarilybe seen as the result of negotiations between parliament and the executive, centraland local government and the services involved (Askim and Christensen 2009). In thecompromise solution, the connection between means and ends has become somewhatblurred. One consequence is that the local structure is a complex one, and the effectsmust be judged according to a combination of standardization and variety. Compromisesin the goal formulation phases have tended to produce ambiguities and new bargainingin the implementation process, thus making it less clear what to expect of effects.The establishment of local partnership arrangements challenges the precondition of equalpartners and tends to favour the more powerful governmental actors. There are alsotensions between different central governmental actors and interests such as professionsand civil service unions and government employers. Overall, as indicated in hypothesis 2,the reform seems to have produced mixed effects. In addition, in interpreting the effects,opinion has not been as divided as expected.

One important side-effect of the reform is what effect it has on political control. Hencea main challenge of the new structure is to find a balance between central control andlocal autonomy. Overall, the new structure seems to be leading to further dominanceby the centre, owing to the ministerial and agency merger, and it seems to have createdan asymmetry in the relationship, even though central respondents emphasize thattheir goal is to achieve balance and a partnership between equals. The results fromthe pilot study and the views of our respondents indicate a mixture of satisfaction andtensions, thus confirming the old wisdom that changes in organizational structure havedual effects (Gulick 1937). Employees are apparently satisfied with the new structurebecause the increased collaboration it offers goes some way towards resolving the formerproblem of fragmentation, and this applies to users as well (Andreassen et al. 2007).The central respondents thought the local solution functioned relatively well, but, likethe local employees, they also saw the presence of a strong consolidated central agencyand its resources at the regional level as a challenge, because it posed a threat to localautonomy.

The cultural perspective, in a dynamic relationship with the structural elements, alsoprovides insight into the tentative consequences of the reforms. Merging or increasingcollaboration between administrative and professional cultures is always a challenge, andthe Nav reform is no exception. There are indications that this process is running moresmoothly at the central level than at the local level, because, at the top, the activities aremore general and strategic and less operational. While the local attitude to collaborationis one of good will, collaboration is hampered by different professional cultures. It is no



easy task to merge these cultures and create a new professional identity, while at the sametime implementing a demanding reform.

So what are the implications of these cultural features for the main goals of the reform?Concerning cultural compatibility, as indicated in hypothesis 3, historically speaking,efficiency is the element that is least compatible with the services’ cultural norms andvalues, a reflection of a more general trend in the civil service in Norway (Christensen2003). This partly explains why efficiency has received less emphasis in the implementationprocess. Getting more people to join the workforce is much more culturally compatible,but difficult to achieve with a low unemployment rate. Service-orientation or user-friendliness is also, after years of NPM in Norway (Christensen and Lægreid 2001),relatively compatible, and has not encountered resistance from the professional groupsinvolved.

The other part of hypothesis 3 is about cultural collaboration between the professionalgroups involved. The pilot study already mentioned seems to indicate a culture thatis developing in a collaborative direction, without having any clear signs of a newadministrative welfare culture (Andreassen et al. 2007). Concerning efficiency, one couldsay that real local collaboration between professionals is a major precondition. If the threeformer administrative units, with their different cultural traditions, continue to followtheir cultural paths, this is likely to result in complexity, conflicts and inefficiency. The goalof getting more people into the workforce must also be closely tied to cultural co-evolutionand collaboration, particularly with regard to multi-service users. Achievement of thegoal of increased user-friendliness must be judged according to how clients see the settingup of one-stop shops. While a seamless service resulting from the gradual developmentof a common culture might be an advantage, people whose needs are simple and whoonly need to use one service may not be particularly happy about ‘their administration’being absorbed into a more common Nav culture.

Concerning the environmental perspective and the technical environment, one of thegoals of the reforms – more people entering the workforce – has clearly been made mucheasier to achieve during the first three years of the reform by a favourable labour marketand the very low unemployment rate in Norway, as indicated by hypothesis 4. Althoughmany respondents think that the reform is instrumental in this respect, they admit thatthis is rather difficult to prove. The reform is also dependent on a good relationshipand collaboration between many actors and institutions: for example, with other sectorssuch as health, and between employers and unions, if the main goals are to be fulfilled.One could say that if pressure from the technical environment had been stronger, as withthe emerging financial crisis, the reform might have run into more trouble in seekingto achieve this goal. The lack of environmental pressure up until now has helped tode-emphasize the efficiency question.

One could also say that the reform is characterized by technical external pressure,whether from the Storting or from the political leadership. Since it was the Storting thatoriginally initiated the reform, it has obviously been following it very closely and isconcerned both with achieving the main goals and with the resources used to do this.This pressure may further the preferred goal of the Storting: increased service-orientationand the ‘one-door’ policy. The political executive is also closely following both theimplementation of the reform and the daily work of the new organization. In 2009, theAudit Office submitted a very critical report on Nav to the Storting (Riksrevisjonen 2009).In January 2010 there was an open hearing in the Storting on issues raised in this report.



The institutional environment is also of relevance for the effects of the reform. Duringthe process, two main concepts – ‘one administration’ and ‘partnership’ – acquired asymbolic status. Both concepts were somewhat ambiguous but they helped eventually tomake the reform possible and politically acceptable. During the implementation of thereform these concepts retained their symbolic value but they also became problematicwhen put to the test in reality. This applies particularly to the concept of partnership,which implies a balance between two equal partners, whereas in reality this has proveddifficult to achieve in a situation where the central level seems to have the upper hand.Overall, as indicated in hypothesis 5, there are features of the institutional environmentthat are furthering a partial decoupling of goals and practice.

CONCLUSIONS

The article demonstrates that context – structural, cultural and environmental – filtersthe effects of administrative reform. It is too early to conclude with any certaintywhether the reform under study, the Nav reform, has fulfilled its main goals. Preliminaryfindings suggest, however, that the reform is better suited to getting more people intothe workforce and to increasing service-orientation than it is to increasing efficiency inthe welfare apparatus. Preliminary findings also suggest that the reform has produceda significant side-effect, namely that it has increased central control over the welfareapparatus, at the expense of local autonomy.

In conclusion we would like to highlight four points. First, assessing halfway-implemented reforms, though instrumental for practitioners who desire feedback, isproblematic. As the current study illustrates, preliminary effects are being observedthough a blizzard, so to speak. Preliminary effects exist in a context of great turbu-lence and a lot of ambiguity, uncertainty and inter-institutional struggles for power andprimacy. Short-term effects in such situations may differ from long-term effects. Onefactor that complicates our assessment of the Nav reform is that we seem to be shootingat a moving target. The goals of the reform have remained stable, but the organizationalmeans have changed somewhat along the way, owing to feedback and learning dur-ing the implementation. While such pragmatic implementation complicates assessment,it is obviously warranted in situations where reform agents’ means-end knowledge iscontested and limited, such as here.

Second, reform adjustments may exemplify both single- and double-loop learning(see Argyris and Schon 1978). Thus far, the Nav reform has undergone the formeronly. The major organizational choices – such as the merger of the employment andthe national insurance agencies, the establishment of a central agency and a quasi-autonomous provider agency, and the introduction of the partnership model – have notbeen altered. Adjustments within and between these broad organizational forms havebeen made, but the forms themselves have so far not been challenged. The question iswhether such adjustments are enough to make the reform successful or if there is a needfor more fundamental changes in the organizational forms. Such double-loop learning ischallenging, and becomes more so with each year that passes, as key reform elementsover time may become institutionalized – the welfare apparatus re-freezes, in Weick andQuinn’s (1999) terms.

Third, we want to highlight the up-side of ambiguity. The Norwegian consensus-oriented style of decision making favours compromises that everyone can accept. Thisentails building some ambiguity into reforms, and thereby allowing leeway for different



interpretations, as exemplified by the partnership solution in the Nav reform. Thepartnership solution appears to challenge two fundamental principles of the Norwegianconstitution – independent local government and ministerial responsibility. Combiningthese principles in one organizational form was made possible by the partnership’sambiguity and symbolic character. The downside of such ambiguity is unpredictability.The question of how the partnership will be specified and practiced is an empirical one.

Fourth, and finally, a point about rationality assumptions should be raised. As thisstudy illustrates, unambiguous cause-effect relations seldom occur. Rather than assumingthat political and administrative leaders will act in accordance with a planning ideal, weshould ask how they function when they lack the time and capacity to give such initiativesfull attention, when goals and means-ends knowledge are unclear, and when there iscultural tension within the leadership.

ACKNOWLEDGEMENT

This paper is part of the ongoing evaluation of the reform in the Norwegian employmentand welfare administration funded by the Norwegian Research Council. An earlier versionof the paper was presented at the IPSA Research Committee 27 Structure and Organizationof Government (SOG) conference: ‘What can we learn about the transformation of thestate in the age of multi-level governance?’ held in Paris on 23–24 May 2008. We want tothank participants at this workshop and two anonymous referees for valuable comments.

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Date received 19 August 2008. Date accepted 9 January 2009.


Documents

How to Assess Administrative Reform? Investigating the Adoption and Preliminary Impacts of the Norwegian Welfare Administration Reform