Infusing Public Law into Privatized Welfare: Lawyers, Economists, and the Competing Logics of Administrative Reform

Published date01 December 2016
Date01 December 2016
Infusing Public Law into Privatized Welfare:
Lawyers, Economists, and the Competing Logics of
Administrative Reform
Avishai Benish Asa Maron
Along with the trend toward “New Public Management” (NPM) and replacing
the legal culture of public bureaucracies with market logic through privatiza-
tion, we are also witnessing instances of “publicization,” the application of
public law norms and mechanisms to privatized services. The article explores
the role of government lawyers and economists in the dynamics of these
administrative reforms. Using a detailed case study of welfare-to-work reform
in Israel, it shows that the reconstruction of decision making and accountabili-
ty patterns under NPM was the result of competing efforts by these profes-
sional groups to appropriate the “privatized state” to accord with their own
institutional logics and interests. While economists advanced a “market” logic,
lawyers tried to reproduce the logic of “law” in the post-bureaucratic setting.
The study demonstrates how eventually public law norms were re-infused
into privatized welfare as a result of the increasing institutional power of the
lawyers in the regulatory space, along with wider political and social support
for the entrenched legalistic mechanisms of the administrative state. However,
in addition to the “battle of norms” between lawyers and economists, there
were also concessions that led to the redrawing of the boundaries of public
law along more functional, rather than formal, lines.
The practice of power and discretion by agents of the state—
whether in government offices, courts of law, or welfare
bureaus—has always been a source of potential contention
(Kagan 1978, 2001, 2010; Mashaw 1983). Historically, public law
provided the framework for both constituting administrative
The authors would like to thank Michael Adler, Sharon Gilad and Ronen Mandelkern
for their insightful comments on an earlier draft of this article, as well as the editors and
the anonymous reviewers for their valuable and helpful comments. The article also
benefited tremendously from discussions with Tomas Burke, Lauren Edelman, Malcolm
Feeley, Liora Isra
el, J
ome P
elisse, and Rachel Stern. Avishai Benish would like to thank
the Center for the Study of Law & Society and the Institute for Jewish Law and Israeli
Studies at the Faculty of Law, University of California, Berkeley, forgreatly facilitating the
writing of the manuscript by providing an intellectually inspiring environment and impec-
cable hospitality during his term as a visiting professor in 2014–15. Asa Maron would like
to thank the Israel Institute and the TaubeCenter for Jewish Studies at Stanford Universi-
ty for their generous support, and the Department of Sociology at Stanford University for
their outstanding hospitality.
Please direct all correspondence to Avishai Benish, The Hebrew University of Jerusa-
lem, Paul Baerwald School of Social Work and Social Welfare, Mount Scopus, Jerusalem
91905, Israel; email:
Law & Society Review, Volume 50, Number 4 (2016)
C2016 Law and Society Association. All rights reserved.
power and controlling it in the name of democratic values
(Krygier 2002; Selznick 1969; Stewart 1975). However, the pivot-
al role of law in public institutions has been severely challenged
over the years, first by the logic of professionalism, and more
recently by the logic of the market (Adler 2003, 2006). Over the
last three decades, we have witnessed the proliferation of New
Public Management (NPM) reforms (Hood 1991), which strive to
adopt market values and mechanisms in the delivery of public
services and to re-conceptualize the state as “entrepreneurial gov-
ernment” (Osborn and Gaebler 1992). Privatized welfare, which
is at the core of this study, has become a domain within which to
experiment with these ideas (Brodkin 2007; Diller 2000; Gilbert
and Gilbert 1989; Lens 2005, 2013).
The introduction of “market logic” into the governance of
public services where, historically, the “logic of law” has prevailed
is a source of tension which remains understudied in the socio-
legal literature (Halliday and Scott 2010). While most of the liter-
ature emphasizes the fact that privatization devolves powers to
actors who are beyond the jurisdiction of public law (e.g., Aman
2005; Minow 2003), a strand in the literature points to instances
where the push toward privatization is pulled back by the appli-
cation of public law to the private agents—what Jody Freeman
terms “publicization” (Freeman 2003. Also see Rosenbloom and
Piotrowski 2005). Such instances of publicization are documented
in empirical studies, for example, in the fields of privatized utili-
ties (Prosser 2000), privatized prisons (Feeley 2014), and priva-
tized welfare (Benish 2010, 2014; Benish and Levi-Faur 2012;
Mulgan 2000).
Nonetheless, little is known about what might
explain privatization and publicization dynamics and the forces
and agents that drive them.
The article explores the roles of government professionals—
lawyers and economists—in the privatization-publicization
dynamics, and considers how they influence the trajectory of
NPM reform in terms of accountability and decision making
structures. Theoretically, the article builds on the socio-legal liter-
ature on the organization of administrative decision making sys-
tems (Adler 2003, 2006; Kagan 1978, 2010; Mashaw 1983) and
on the sociological and socio-legal literature on new institutional-
ism and institutional logics (Edelman et al. 2001; Friedland and
Alford 1991; Gilad 2014; Talesh 2009, 2015; Thornton and
Similarly, in a central study on the effects of NPM, Pollitt and Bouckaert conclude
many states resisted the pull toward market-like public governance by
favoring traditional law-based administration (what they call a neo-Weberian model). This
trajectory, in which privatization is accompanied with regulatory growth, connects with
what Levi-Faur (2005) calls “regulatory capitalism”.
954 Infusing Public Law into Privatized Welfare
Ocasio 2008). Empirically, it builds on a detailed case study of the
Israeli welfare-to-work reform, which, inspired by welfare reform
in Wisconsin, started as a radical experiment in privatized and
incentive-based welfare governance but underwent a significant
shift back to law-based governance.
The contribution of the article is twofold. First, while prior
research on administrative justice in socio-legal scholarship has
focused almost entirely on public agencies (Halliday and Scott
2010; Kagan 2010), this article sheds light on the organization of
decision making and accountability under privatized and marke-
tized forms of governance. Second, it recognizes the unique role
of government lawyers and economists in the process of re-
organizing accountability and decision making under NPM. By
tracing their roles in the policy process, it provides an empirical
observation on the competing, and at times conflicting,
“institutional logics” of the lawyers and economists on what con-
stitutes appropriate governance of privatized welfare. In doing
so, it illustrates the active role lawyers and economists play in the
diffusion of the logics of “law” and the “market” across the tradi-
tional public/private boundaries as they attempt to appropriate
the “privatized state” to accord with their own institutional logics
and interests. The article also shows how changing power rela-
tions and unfolding distrust of the contractors’ decision making
ultimately advanced the legal logic of governance, a move led by
government lawyers after gaining the support of other actors in
the regulatory space.
The article starts with a discussion of decision making pat-
terns in the public sector and their transformation with the shift
to NPM, focusing on shifting sources of public and political legiti-
macy. The following section introduces the notion of “institutional
logics” as a prism through which to study the role of government
professionals in the design of new decision making patterns. After
accounting for the methodology of the study, it shifts to the
empirical case: processes of privatization and publicization of the
Israeli welfare-to-work reform. This is followed by a discussion of
the ramification of these dynamics on the trajectory of the
reform, and more broadly, on the agents and mechanisms of
publicization affecting NPM reforms.
Dynamics of Change in Administrative Decision Making
How are administrative decision systems organized? Kagan
(2001), in his seminal work on adversarial legalism, provides an
illuminating typology of administrative decision making. Building
Benish & Maron 955

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT