Project B8:

The role of middle men in the implementation and feasibility of reforms





Prof. Gerard van den Berg, Ph.D.

Hanno Foerster

Prof. Dr. Annette Bergmann


 Duration:01.01.2014 - 31.12.2017



Policy reforms are often implemented through institutions in-between the state and individual citizens. The state decides on the rules of the policy and possibly the funding for the policy, whereas the institutions take care of the implementation of policies and policy reforms at the level of individual citizens. Typically, employees at these institutions provide services to individual citizens. These employees (“middle men”) often have substantial discretionary power over the implementation of the policy. Two examples are (i) case workers at employment offices, who provide job search assistance and/or take care of unemployment benefits payment, and who monitor the job search behaviour of the unemployed, and (ii) medical personnel at health centres, who decide on medical treatments. The observation that middle men who have the same type of job provide different services to their clients suggests that these middle men actively use their discretionary powers. This in turn may explain why it is so hard to implement policy reforms in fields where middle men play a role.

In this project, we analyse the role of middle men in the process of reform implementation, in a number of concrete studies, and using unique data sources. The first study concerns the role of case workers in the German employment office (BA), who also have substantial discretionary power. We aim to carry out randomised social experiments with the BA to consider reforms of the timing and content of meetings between case workers and unemployed individuals. We have access to register and longitudinal survey data on unemployed individuals and case workers, data on actual treatments (i.e. any intervention or policy exposure happening to an individual), on employment histories, and on individual labour market outcomes. Related work will be carried out using Swedish data, concerning reforms to monitoring and sanctions policies for unemployed individuals.

We also aim to consider the role of medical experts, such as physicians, in response to policy changes in the health care reimbursement system, using Swedish data in which individuals’ history of contacts with the medical system and diagnoses are followed over time. These data allow us to estimate models with individual fixed effects and medical-expert fixed effects and to exploit recent reforms in the system.

In all these studies, we quantify the extent to which the impact of reforms were affected by the role of the middle men. Potential obstruction by middle men may have implications for the set of reforms that are deemed feasible. Moreover, this calls into question whether the role of middle men should be subject to reform. We consider alternative schemes where middle men are replaced by expert systems, where we also address disadvantages of the latter, notably a lack of flexibility to deal with turbulence or structural shifts in the labour market.