Professional Documents
Culture Documents
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The research leading to these results has received funding from the European Union’s Seventh Framework Programme under
grant agreement No. 266887 (Project COCOPS), Socio-economic Sciences and Humanities.
Public officials’ equity-efficiency trade-off
Abstract
This paper analyses the value trade-offs leading public servants make in European counties.
Top civil servants’ views, attitudes and behaviours exemplify the values public institutions
cherish. By studying the values held by top civil servants one can deduct the dominant value
approaches of public institutions. Using the 17- country COCOPS population study among
central government top civil servants, this paper maps and explains the value trade-offs they
make (Hammerschmid et al., 2016). More in particular, the paper analyses the classic equity-
efficiency value trade-off (Okun, 1975). The paper will first provide a descriptive picture of
top civil servants’ value preferences across 17 European countries. It will then try to explain
differences by looking at the context within which these civil servants work. To explain civil
servants’ personal position between equity and efficiency, we explore four distinct
hypotheses.
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Public officials’ equity-efficiency trade-off
Introduction
Conflicting and incommensurable values have received a lot of attention in philosophy and
economics, but less so in public administration where attention is limited to a fairly small
group of scholars interested in public values. Yet, attention for public values appear to be on
the rise (Box, 2015), and substantial progress has been made in relation to mapping,
categorising and conceptualising public values (DeForest Molina and McKeown, 2012; Van
der Wal & Huberts, 2008; Van Wart, 1998). This paper adds to the body of work on public
values body by using data from 14 different countries.
Easton famously described politics as the authoritative allocation of values (Easton, 1965).
Government has to make choices between conflicting values. These tensions between values
can be found everywhere within the public sector, especially when there is allocation and
redistribution. The ‘uneasy compromises’ between values are represented in institutional
arrangements (Okun: 1975: 1). Public management is about managing contradictions
(Greener, 2013; Pollitt and Bouckaert, 2014). Civil servants want to achieve values and
objectives that may be incompatible (De Graaf et al., 2014; Andrews and Van de Walle, 2013;
Andrews & Entwistle 2010) and thus have to choose in daily administrative practice. This
paper analyses the value trade-offs top civil servants make, and more in particular the equity-
efficiency trade-off, and the determinants of this trade-off. We follow Molina’s definition of
value – ‘as a complex cognitive-emotional preference for some object, quality, or
characteristic that serves as either a means to an end (instrumental value) or an end in itself
(terminal value).’(Molina, 2015: 50).
The efficiency-equity trade-off is one the perennial questions in the social sciences. A trade-
off refers to situation where one has to balance or choose between two objectives that are
opposite or that cannot be had at the same time (Merriam Webster dictionary). If one goes up,
the other goes down. In a trade-off situation, two objectives cannot be achieved
simultaneously. Examples of the efficiency-equity trade-off can for instance be found in the
allocation of landing slots to planes, or in the order of serving clients in an administrative
office, where it may be more efficient not to allocate in order of appearance. The issue is also
very salient in school reforms, where officials have to find a balance between school
efficiency improvements and avoiding social segregation.
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Public officials’ equity-efficiency trade-off
The academic beginnings of the debate on the efficiency-equity trade-off have been attributed
by Le Grand (1990) to Barry (1965), who was discussing the evaluation of social outcomes in
politics and policy. Barry argues that, if there’s for someone a trade-off between equity and
efficiency, this means that ‘If it’s a question of choosing between efficiency and equity, it
takes a large potential increase in equity to make him accept a potential reduction in
efficiency (and vice versa)’ (Barry, 1965: 7). While different concepts, equity and equality are
often used interchangeably. Equality refers to a situation where everyone is given equal
resources (here, public services), whereas with equity, the resources are related to need, in
order to achieve an equality of outcomes.
Okun’s 1975 ‘Equality and Efficiency: The Big Tradeoff’ is probably the best known treatise
on the efficiency-equity trade-off. Okun discussed the observation that society often prefers
equality-based approaches over market-based efficiency-oriented ones; and that checks on
markets are common and sometimes desirable. He argues that there are parts in society where
society opts for more equality, thereby compromising efficiency (Okun: 1975: 5). The
opposite is not discussed in great length in Okun’s book, because, addressing economists, he
assumed economists would be familiar with such market logic already. Markets pursue
efficiency ‘But that pursuit of efficiency necessarily created inequalities. And hence society
faces a tradeoff between equality and efficiency’ (Okun, 1975: 1). In other words – ‘We can’t
have our cake of market efficiency and share it equally’ (Okun:, 1975: 2)
The book is written with distributive policies in mind, and introduced the image of a ‘leaky
bucket’. The leaky bucket refers to efficiency losses that occur during redistribution aimed at
reducing inequality. These efficiency losses are due to changes in incentives following the
redistribution and administrative costs involved in redistribution (Okun: 1975: 92). For Okun,
the size of the leak – or how much efficiency loss one is willing to tolerate to increase
equality, is a matter of taste. Okun compared a Rawls who would always prefer equality no
matter how large the leak, to a Friedman who would give priority to efficiency, and would
have a very low tolerance for leaks (Okun, 1975: 92). This article contributes to explaining
differences in this taste among key policy makers: Central government top civil servants in 14
European countries.
Okun’s equality/efficiency trade-off has become a classic, but not everyone agrees there is
actually a trade-off. Osberg (1995), for instance, refers to the observation that countries with
high equality also tend to grow fast, and that hence the trade-off probably does not exist. Le
Grand elaborated a convincing argument ‘that the notion of a trade-off is meaningless. For
acceptance of this interpretation implies that efficiency can be defined only in relation to the
ability of forms of social and economic organization to attain their primary objectives and that
therefore efficiency cannot itself be one of those primary objectives. In this sense, if equity is
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Public officials’ equity-efficiency trade-off
Technically, Le Grand is right. Yet, Rutgers and van der Meer (2010) argue that efficiency
has always had a more substantive meaning in public administration (mainly up till the 1960s)
beyond the mere technical one (as also used in Le Grand’s argument). Especially in recent
decades, we would argue that efficiency in the public sector has also become a primary
objective of itself. Efficiency improvements have been at the core of the NPM, and the big
NPM reforms such as consumerism, agencification, performance management, or competition
were all implemented with an aim of improving efficiency (Andrews, 2011: 282). Bozeman
similarly posits the primacy of efficiency within the NPM: ‘It seems clear that, according to
almost all descriptions of NPM, the driving values are performance and efficiency, while
fairness, by any definition, rarely received much emphasis in NPM’ (Bozeman, 2007: 80). In
the same book/article, he argues: ‘The values embodied in privatization and NPM […] are
efficiency and effectiveness values, not equity, fairness, or communal values’ (Bozeman,
2007: 82). NPM’s focus on efficiency in this way stands in sharp contrast to e.g. the New
Public Administration in the 1970s, where social equity was the core value (Box, 2015).
Efficiency is a core administrative value (Andrews & Entwistle, 2013; Rutgers and van der
Meer, 2010). The traditional bureaucratic model is characterised by both equity and
efficiency: equity as the result of law- and rule based behaviour; and efficiency as a result of
specialisation and standardisation. Yet efficiency ‘has come to be associated with the private
sector solutions embraced by the New Public Management’ (Andrews & Entwistle, 2013:
247). Van Wart and Berman (1999) see a move towards tougher standard of efficiency, and a
wider value change of what is seen as productivity following the introduction of NPM-
management tools. Especially following the introduction of the new public economics
thinking in public administration, efficiency has become an objective in its own right, rather
than a secondary one supporting the achievement of other objectives, such as equity. Beck
Jørgensen and Rutgers (2014), following an analysis of historic public sector job adverts, find
that, while the importance attached to NPM values has increased substantially over time ‘New
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Public officials’ equity-efficiency trade-off
Public Management values do not crowd out other values, rather value intensity increases.’
(2014: 59).
The apparent contradiction between equity and efficiency has been one of the main bases for
criticizing the NPM. It has been argued NPM comes at the cost of equity because of its focus
on the bottom line, and that therefore safeguards are needed to protect values that are under
attack. This has for instance been the case in utilities where public values such as universal
service, affordability or continuity has to be legally protected the wake of privatisation or
liberalisation (Van de Walle, 2008; De Bruijn & Dicke, 2006).
In Hood’s seminal 1991 paper on the NPM, efficiency (a ‘sigma’ value) and equity (a ‘theta’
value) represent different families of administrative values. NPM is characterised by sigma
values, with little regard for equity. The latter, it can be argued (cf. Hood, 1991: 10), can very
well be achieved through typical NPM-like programming and target setting. One could also
argue the equity-efficiency tension is not inherent to NPM, but that efficiency is a
precondition for equity to be possible – first increasing the size of the cake in order to allow
for a more equitable distribution of the cake. Indeed, in a recent study we found that NPM-
style structural reform is not only positively associated with (perceptions) of improvements in
cost and efficiency, but also in equal access to services (Hammerschmid et al., mimeo).
While public values are receiving increasing attention (Van der Wal et al., 2013), many
studies have limited themselves to categorising values or studying the presence of values
within organisations. Some scholars have for instance looked at value statements of
government organisations (Kernaghan, 2003) or at codes of conduct (Beck Jørgensen and
Sørensen, 2013) . There also is an extensive body of research on public administrators’ values
and the value conflicts they experience (De Graaf, Huberts, and Smulder, 2014). Yet, not
many studies have looked at value preferences beyond those that look at (party-)political
preferences of civil servants. Exceptions are mainly to be found in health where the tension
between competing objectives such as cost-effectiveness and equity are particularly tangible
(Ratcliffe et al., 2009).
Some studies have looked at the position of efficiency as a value for civil servants. Andersen
et al., 2012 for instance find a correlation between civil servants’ support for efficient supply
with their commitment to the public interest. Efficient delivery is then seen as a way of
serving the public interest. In his study on cutbacks Schmidt (2016) found that top civil
servants saw frugality as a crucial value in their task as managers, precisely because they are
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Public officials’ equity-efficiency trade-off
dealing with public money. Yet, in a study among state and local administrators, DeForest
Molina and McKeown (2012) found that efficiency ranked rather low in importance among a
set of values. In a similar vein, Vrangbæk (2009) studied value orientations of public
managers in Denmark. He found that while managers listed efficiency as a value, they do not
put it very high on their list of important values in their work. He also found that efficiency
was seen as less important by managers working in more operational organisations, and more
so by those working in more traditional bureaucratic and administrative organisations. The
former instead emphasised satisfying user needs. De Graaf and Paanakkker (2015) report on
interviews with aldermen and senior administrators to look at conflict between performance
and procedural values. They found that respondents mainly found conflict between lawfulness
and transparency on the one hand and efficiency and effectiveness on the other. Equality did
not feature prominently.
Molina sees public administration values ‘as a contextualized set of attitudes’ (Molina,
2015:49). This means it is important to take the social and administrative context of the
administrator into account when explaining the value trade-offs they make. We have earlier
referred to the New Public Administration’s attention for social equity as a result of poverty
and discrimination in society, and to NPM’s focus on efficiency as the result of inefficiencies
and savings and the rise of new public economics. In this paper, we assume that context
determines the value trade-offs officials make: their work, their prior experience, their task,
the administrative system they work in, the society they are part of. Four hypotheses emanate
from this assumption.
H1: Distance hypothesis: Closer distance to recipients of policies and services is related to a
higher pro-equity orientation
We assume that proximity to the recipients of policies and services makes a public official
more equity-oriented, because proximity means he or she can observe the direct consequences
of the choices made on individual people. The context of working at a large distance from the
actual recipients may make officials more concerned with the internal organisational
objectives, rather than with external recipients. Certain types of public officials are closer to
recipients. First, it is assumed that top managers are further removed from the operational
reality as compared to heads of unit or normal employees. Second, we also assume that if a
public official is working for a smaller organisation, he or she will be closer to the actual
recipients. Thirdly, we also assume that officials working for agencies will have a higher pro-
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Public officials’ equity-efficiency trade-off
equity orientation, because they are closer to users. This is in line with earlier findings by
Vrangbæk (2009) who found that (Danish) managers working in operational organisations
tended to find satisfying user needs more important than efficiency. Efficiency was mainly
seen as important in more administrative parts of government. Beck Jørgensen (2006) finds
that Danish agency-level respondents attach considerable lower importance to efficiency than
do respondents in departments, and higher importance for equal opportunities and user needs.
Both findings go against the expectations of agencies as carriers of NPM values, such as
efficiency. Van Thiel and Van der Wal (2010) find that Dutch agencies value NPM-related
values, such as profitability higher than ministries. Andersen et al. (2012) on the other hand,
do not find a significant difference between the score on efficient supply as a value for
respondents working in authorities (ministries and equivalent organisations) and agencies in
the Danish public sector. Neither is there a difference between service provision vs
regulatory/administration oriented-organisations
H2: Public sector hypothesis: the more a public official is influenced by neoliberal/npm
reform ideas, the more pro-efficiency oriented they will be
The second hypothesis is that the habitus of a public official shapes his or her value
preferences, and that public officials’ values have been impacted by the NPM (Maesschalck,
2004). More specifically, we assume that exposure to a private sector environment instils
officials with a stronger preferences for efficiency. Frederickson (2005) described the crucial
difference between the public and private sector as a different trade-off between efficiency
and fairness. Whereas for the former, fairness is the main value, efficiency is the leading
value for the private sector. Public-private differences have attracted a fair deal of attention in
the public values literature, especially following an influx of mangers in the public sector with
private sector experiences – so called sector switchers (De Graaf et al., 2008; Boardman et al.,
2010). Still, there is discussion whether differences in values are actually that important
between the sectors (see Van der Wal, 2008). Van der Wal et al. (2008) show that there are
indeed differences in the values public and private managers find important, yet their
empirical work shows that both groups attach equal importance to efficiency as a value
driving their work (2008: 475). Exposure to the private sector can happen in different ways:
prior work experience in the private sector, or having enjoyed a business-oriented education.
Long tenure in the public sector is then an indicator of having been exposed to the public
sector habitus.
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Public officials’ equity-efficiency trade-off
H3. Country administrative culture hypothesis: Public officials in Scandinavian countries are
more pro-equity oriented, Eastern European countries are more pro-efficiency oriented
A third hypothesis looks into the assumption that it is not just an official’s organisation or
private background that shapes his or her value preferences, but rather the broader
administrative culture within which they work. Some administrative cultures have for instance
a more legalistic outlook, which could mean efficiency features less prominently. There have
been many attempts at defining clusters of administrative cultures, yet these tend not to be
conclusive on some countries in our dataset, and especially in relation to central European
countries, they tend to lump all countries together in a single category. Or they put Ireland in
the same category as the UK. Also, since our dataset only covers 14 countries, some
administrative culture categories were represented by just one single country. For this reason,
we decided to only use a simple categorisation of administrative culture, with the
Scandinavian countries belonging to the equity group, and the Eastern European countries to
the efficiency group because of their strong support for market values (REF).
H4. Popular preferences hypothesis: Public officials in countries where population is more
left-wing are more pro-equity oriented
A final hypothesis assumes that public officials are responsive to their environment and make
choices that reflect the make-up of the population they are serving. This means that they will
be more equity-oriented in countries where the population if more politically left wing, and
more efficiency oriented where it is more right wing.
Data
The analysis uses the COCOPS Top Public Executive Survey, a population survey of top
public sector executives in European countries. Data for the UK were not used due to a low
overall response rate and high item non-response for the dependent variable. We decided to
also leave out the Serbian data. All other countries were kept, but a robustness test was
performed by deleting one country and repeating the estimations. After deleting cases with
high item non –response on crucial values, the final dataset consist of 4238 respondents in 14
countries
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Public officials’ equity-efficiency trade-off
Variables
Average s.d.
Equity-efficiency position 3.55 1.62
Sex
Male 3.59 1.61
Female 3.48 1.62
Age
<46 3.69 1.63
46-55 3.52 1.61
>55 3.48 1.6
Education
MA 3.56 1.62
PhD 3.41 1.59
Field of education
Law 3.51 1.62
Business / Economics 3.76 1.6
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Public officials’ equity-efficiency trade-off
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Public officials’ equity-efficiency trade-off
Independent variables:
I. Individual-related
Gender. Females vs males
Age. <46, 46-55, >55 (reference)
Educational qualification MA vs rest; PhD vs rest
Subject of education: law, economics/business and social sciences, vs the rest
Seniority in the public sector. <5, 5-10, 10-20, >20 (reference).
Experience in the private sector. >1year vs rest.
II. Service/post-related
Kind of position 2nd level and 3rd level, vs 1st level (reference)
Type of organization: agency, vs government
Policy area: general government and foreign affairs; finance and economic affairs;
infrastructure and environment; defense and justice; employment; health and social
protection (separated from employment); education and recreation; other
Size of the organization: <50, 50-500, >500 (reference)
III. Country-related
Typification/classification of countries according to administrative cultures
(Hammerschmid et al). Scandinavian, Transition (Eastern) and Southern, vs
Continental and Anglo-Saxon (Ireland) as reference category
Average political placement (from 0, left to 10, right), ESS
Controls variables
The advent of the NPM meant that results replaced due process as the main purpose of public
organisations (Tait, 1997). We thus assume that older public officials with long tenure had
their formative years before the advent of NPM, and will be less likely to put result ahead of
due process. The model controls for this through age and length of tenure.
We use OLS regression with standard errors clustered at the country level (for correcting
country heterogeneity –clusters-). Four different models are tested. The first includes
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Public officials’ equity-efficiency trade-off
individual factors only. The second adds variables related to the respondents position and
organisation. Model three adds country dummies, and model four adds the country’s group
membership and political placement. Missing values are eliminated when estimating, meaning
that the number depends on the model. Robustness checks, for testing country representativity
are pending in this version
Findings
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Public officials’ equity-efficiency trade-off
Type of organization
Government
Agency -0.241 (0.125)* -0.098 (0.076) -0.159 (0.077)*
Area
General gov. & Foreign aff. 0.074 (0.090) 0.069 (0.055) 0.076 (0.055)
Finance & Economic affairs 0.050 (0.074) 0.012 (0.073) -0.006 (0.079)
Infr., Transp. & Environm. -0.007 (0.059) -0.018 (0.053) 0.022 (0.057)
Defence, justice & pub. ord. 0.053 (0.089) 0.026 (0.076) 0.011 (0.073)
Employment 0.183 (0.096)* 0.230 (0.087)** 0.285 (0.093)***
Health & Soc. Protection -0.195 (0.049)*** -0.188 (0.042)*** -0.209 (0.043)***
Education & recreation -0.247 (0.079)*** -0.200 (0.065)*** -0.201 (0.060)***
Size
< 50 -0.106 (0.127) 0.020 (0.098) -0.067 (0.101)
50-500 -0.160 (0.067)** -0.121 (0.045)** -0.169 (0.045)***
> 500
COUNTRY FACTORS
Country
Austria -0.380 (0.034)***
Denmark -0.146 (0.067)*
Estonia 0.644 (0.059)***
France
Germany -0.366 (0.054)***
Hungary 0.797 (0.042)***
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Public officials’ equity-efficiency trade-off
Females, no effect
Age, no effect
Education, PhD more pro-equity
Field of education:
o Economics/business, more pro-efficiency
o Rest, no effect
Seniority: less seniority, more pro-efficiency
Experience in the private sector, no effect
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Public officials’ equity-efficiency trade-off
Model 3
Countries (with respect to France, reference)
o Hungary, Estonia, Netherlands, Italy, Ireland, Portugal, Spain (in this order),
more pro-efficiency
o Lithuania, Sweden, Austria, Germany, Denmark (in this order), more pro-
equity
o Norway, non significant difference
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Public officials’ equity-efficiency trade-off
- H1: Distance hypothesis: Closer distance to recipients of policies and services is related to a
higher pro-equity orientation
- H2: Public sector hypothesis: the more a public official is influenced by neoliberal/npm
reform ideas, the more pro-efficiency oriented they will be
Seniority: yes. Partly a general effect, but basically a country specific effect
Business/economic education: yes
Private sector experience: no
Sector: yes, i.e. health & social protection and education vs the rest
- H4: Popular preferences hypothesis: Public officials in countries where population is more
left-wing are more pro-equity oriented
yes, more left-wing population, more pro-equity civil servants; more right-wing, more pro-
efficiency
Limitations
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Public officials’ equity-efficiency trade-off
- abstract approach to the trade-off – no context. The trade-off made could be different in
specific sectors, or when related to specific dilemma;
- we cannot really interpret the agency effect: is this an agency effect, or is it the result of
task-specificity?
- we only look at the trade-off – this is just their statement, but do not study how they cope
with this trade-off or value conflict (Van der Wal et al., 2011)
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Public officials’ equity-efficiency trade-off
Annex
Dimension Variable % N
INDIVIDUAL CHARACTERISTICS
Sex 4,148
Age 4,224
Education 4,238
MA 60.1% 2,547
POST/ORGANIZATION CHARACTERISTICS
Position 4,112
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Public officials’ equity-efficiency trade-off
Area 4,238
Size 4,195
23
Public officials’ equity-efficiency trade-off
24