A PRESCRIPTION REJECTED - MARKET SOLUTIONS TO PROBLEMS OF PUBLIC-SECTOR GOVERNANCE

The New Public Management includes the idea of incorporating market me chanisms in public sector governance. In the Danish case, market refor ms have scarcely been used; private sector supplies of public services have not increased during the last decade. The lack of success of mar ket reform in Denmark is explained by the strong institutions of tradi tional public sector governance operating at the micro-level. Formal a nd informal hierarchy and formal and informal corporatism hold a stron g grip on public sector governance. The very decentralized structure o f the Danish public sector decreases the importance of central governm ent in terms of reform strategies. Strong interests and institutional constraints keep reforms in the Danish public sector within it hierarc hical mode of governance.