Effective Management for National or Local Policy Objectives?

This research considers the role of local policies and management in affecting street-level bureaucrats’ actions in implementing national policy mandates. The focus on sanctioning behavior by social workers provides a strong test of these effects, given that the behaviors are both visible and have consequential policy outcomes. We extend principal-agent theorizing to frame decisions by street-level bureaucrats as the result of a set of interlocking principal-agent chains that establish different information asymmetry problems. The setting is the implementation of a Danish welfare and employment policy for which a shift in policy placed greater emphasis in 2003 on the use of sanctions for the failure of clients to participate in employment-enhancing measures. The policy was to be implemented by 268 semi-autonomous municipalities. We use data from nation-wide surveys of CEOs of municipal employment services, middle managers, and front-line workers. Key findings are that local politics matters in affecting how municipal policies fit with the national mandate. Management also matters. Greater application of the goal-directed management tools of clearly signaling managerial expectations and recruiting workers with a better fit with the goals of the organization increases workers’ compliance with local policy goals, but only when these diverge from national ones! Increasing staff capacity and information provision have simpler effects in fostering more compliance with the national policy mandate among workers. Managers’ addressing adverse selection problems seems more effective than coping with moral hazard. The combination of local politicians’ influence on the formation of local policy goals and managers’ influence in getting workers to comply with those indicates a very important role for policy implementation at the local level.