Yesterday, Team Leader of the Youth Employment Project (YEP), Mr. Ranko Markus, presented the paper „Public Employment Services Moving from Public Monopolies towards Quasi-markets“at the 7th International Conference of the School of Economics and Business in Sarajevo. The paper is published in the Conference Proceedings. The abstract is presented in the following text and full article is available at this link. YEP developed and published 19 Working Papers do far in order to induce experts’ discussion which should lead towards improvements of the public employment sector in Bosnia and Herzegovina.
The 7th ICES Conference continues the initiative started in 2002 by a group of academics interested in developing research in Central and Eastern Europe undergoing the process of systematic and economic transition. This conference aims to bring together academics as well as practitioners to discussdiverse issues in the fields of economics and business with a focus on transition economies. The purpose of this conference is to disseminate high quality research and to promote scientificinformation interchange between researchers, developers, students, and practitioners.
In Bosnia and Herzegovina, Public Employment Services (PES) provide services through public monopolies, without any system in place which would ensure the best possible service delivery to its clients. PES delivers identical services, with fixed costs, while the only difference is its quality or efficiency. The key regulator’s (PES management or government) issue should be how to ensure good quality services, which can be measured, and constantly improved. In order to achieve its goals, the regulator has to be able to assess competitiveness of the sector, but also to conduct comparisons across individual service providers. This would set the basis for a competitive environment.
This paper provides practical solutions to move public monopolies towards quasi-markets. As a result of the model, PES local office managers will be measured against their peers, that will bring competitive pressure to provide services more efficiently and responsively, and (in)directly clients will get better service at the end.
In order to establish comparisons it is important to establish measurable objectives for services, in line with relevant legal acts and strategies, and they can be summarised as follows: quick and permanent reintegration of registered job seekers into the labour market, prevention of long-term unemployment and prevention of long-term usage of unemployment benefits.
The efficiency calculation has been made for 58 municipal employment bureaus (MEB), which rank MEBs based on their operational efficiency – deregistration of unemployed persons in the shortest possible time as a result of their integration into the labour market. Calculation has been faced with problems of different exogenous conditions (e.g. population density, local economy, working population age, skills gap, etc.) which influence efficiency of MEB. Therefore, researchers used Pearson Correlation Matrix to assess the relationship between external factors and efficiency indicators.
Influential external factors are included in the calculation of the efficiency indicators, by using COLS regression, which gave relative efficiency of a service provider, and ranked them in efficiency order. In this quasi-market order, the most efficient service providers are being recognized, while all others are encouraged to reach at least sector average.
This method is being used to assess the efficiency of public sector, where management by objectives operationalizes strategic objectives and translates them into quantified norms. It is important to justify invested public funds, through good quality impact reached by its expenditure.
