Objectifying trustworthiness: Market formation in the transport policy field

• Date: 01 February 2020
• Published date: 01 February 2020
• DOI: http://doi.org/10.1111/faam.12192
• Author: Emma Ek Österberg

Received: 8 August 2017 Revised: 31 August 2018 Accepted: 6 November2018

DOI: 10.1111/faam.12192

ORIGINAL ARTICLE

Objectifying trustworthiness: Market formation in

the transport policy field

Emma Ek Österberg

School of Public Administration, Universityof

Gothenburg, Göteborg, Sweden

Correspondence

EmmaEk Österberg, School of Public Administra-

tion,University of Gothenburg, Box 712, SE-405

30Göteborg, Sweden.

Email:emma.ek@spa.gu.se

Abstract

This paper addresses market formation in the public sector, par-

ticularly questions of how and why market arrangements for pub-

lic services change, and what it means in terms of governance. The

paper presents an in-depth empirical study of a case in the Swedish

transport sector, building on sociological research into market for-

mation, particularly the work of Callon, Méadel, and Rabeharisoa on

the qualification of products. Giventhe demand for process-oriented

research into market relations, especially in the public sector, this

studyempirically illustrates how and why roles, relations, and objects

are maintained and transformed, and how these features are cocre-

ated in practice. Although previous research has paid relatively little

attention to product qualification, this paper demonstrates that it is

useful to put this process at the center of the analysis. The present

findings emphasize that how products came to be objectified, in

terms of provider qualities rather than technical specifications, was

the compromise that enabled various logics to be at stake simul-

taneously. The paper also contributes by demonstrating that NPM

reforms of marketization can accommodate far-reaching attempts

by public organizations to influence the market, which is especially

relevant in markets in which public-sector organizations are domi-

nant purchasers.

KEYWORDS

market formation, product qualification, public procurement, pur-

chasing strategies, transport policy

1INTRODUCTION

Marketsare increasingly used in delivering public services, a process often referred to as marketization. Marketization

is firmly rooted in New Public Management (NPM) ideas, in which competition is seen as a key driver of efficiency and

quality in public services (Hood, 1991; Lapsley & Knutsson, 2017). However,it would be misleading to understand and

analyze market arrangementsin public sector solely on the basis of a NPM logic. First, there are several layers of ideas

and approaches in public sector reforms. Recently, Hyndman and Liguori (2016) argued that NPM ideas coexist and

Financial Acc & Man. 2020;36:3–19. wileyonlinelibrary.com/journal/faam c

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4EK ÖSTERBERG

interplay, ratherthan compete, with traditional Public Administration (PA) ideas and New Public Governance (NPG),

whichwas also suggested by Lapsley (2017) and Pollitt and Bouckaert (2011). Second, although marketization has been

described as implying a “substantial redesign of management models and control tools” (Cristofoli, Ditillo, & Liguori,

2010, p. 351), empirical research on such arrangements suggestthat these models and tools by no means are clear-cut

market-based. Rather different modes of governance (i.e., marketbased, bureaucratic and trust based) are blended—

despite the strong NPM rhetoric (e.g., Cristofoli et al., 2010; Kastberg, 2014; Wiesel & Modell, 2014).

Also, several researchers have pointed out the importance of empirically investigatinghow market arrangements

(in both the public and private sector) change over time and the dynamics involved in these processes (e.g., Chua &

Mahama, 2007; Kastberg, 2014). Kastberg’s (2014) study of an internal market arrangement in the public sector indi-

catedthat formative issues regarding roles, relationships and the content of the services, never really get solved but has

to be dealt with over and over again, and Wiesel and Modell (2014) underlined the importance of taking into account

the alignment of interest in processes by which diverse governancelogics are brought together in a public market con-

text. Despite contributions like these, which illustrate dynamics and change, there is still a tendency to treat market

relations in a static manner and to focus on each mode of governance separately(see arguments by Håkansson & Lind,

2004; Mahama & Chua, 2016; Wiesel & Modell, 2014).

This paper reports a process-oriented study of marketizationwhose aim is to explore how and why market arrange-

ments for public services change, and what it means in terms of governance. In doing so the paper aims to contribute

to increased understanding of public marketsand the governing role of public agencies in market arrangements, which

is a theme highly debated among researchers. While Fligstein (1996) highlighted the role of states in creating institu-

tional conditions (e.g., property rights, laws, rules of exchange)for markets (in general) to develop and stabilize, organi-

zational researchers have illustratedthe multiplicity of organizing activities in markets in which states as well as other

organizations are involved(Brunsson & Jutterström, 2018). Researchers within the field of governance have suggested

that governmentsand public agencies have been transformed into meta-governors that exert influence mainly through

designing the arrangement in which public services are delivered (e.g., Pollitt& Bouckaert, 2011; Jacobsson, Pierre, &

Sundström, 2015). Public agencies may also take on the role of purchaser and contractualp artnerwho acts ( andg ov-

erns) within the framework and rationality of these arrangements. Both these “levels”of governance (i.e., governance

of and governance within) are visible in the analysis in this paper,although I do not deal with them as levels. Using the

terminology of Ahrne, Aspers, and Brunsson (2015) who identify categories of organizers, these public agencies act as

market organizers both from a distance (as “others”)and within market relations (“as buyers”).

I takeas my departure a case, from the Swedish transport sector, where the government initiated a reform, strongly

supported by a NPM rhetoric, with the purpose of creating more efficient markets. The Swedish TransportAdminis-

tration (STA),which is the state agency responsible for building and maintaining state owned roads and railroads, got a

key role in the process. Not only did it become bearer of the reform ideas, it was also its own purchasing practicesand

modes of governance that became the tool whereby the reform ambitions of more efficient markets were to be real-

ized. What happened in practice,and what it came to mean for the STA and the construction market, is what constitutes

the empirical focus in this paper.

The theoretical point of departure is sociological research into markets, especially the writings of Callon (1998; see

also, e.g., Callon & Muniesa, 2005; Callon, Méadel, & Rabeharisoa, 2002) which draw attention to ongoing processes

of market formation and what is required for markets to work. Constitutive elements of markets,such as calculating

agencies, market encounters, exchangeableobjects and prices, are within this field of research not premises, but phe-

nomena to explore. Hence, it is a fruitful perspectiveand analytical tool to empirically investigate processes of change,

by drawing attention to activities of formation and reformation of these elements. Building on this, the analysis in this

paper centers actors, that is, the redefinition of the roles of purchaser and providers,and the reorganization of relations

between them, and objects, that is, the qualification of products, in this case constructions and services for building and

maintaining roads and railroads.

The findings of the paper suggest that although improvementof the functioning of the market was a key argument in

the reform rationality,supported by a NPM rhetoric underlining clear boundaries, this rationality seemed to accommo-

date far-reaching attempts to governance. That the state, in this case, channeled its influence through its demand (as a