The role of agencification in achieving value‐for‐money in public spending

Abstract

Agencification has been pursued globally under the promise of increasing public administration performance. In spite of ample theoretical arguments, the empirical evidence on the causal link between agencification and performance remains scarce and methodologically contested. We contribute to this debate by empirically testing the impacts of agencification across Germany, Spain, and the United Kingdom on valuefor-money, competitiveness, and timeliness during the period 2006–2016. We use unique administrative datasets, enabling objective and granular measurements of reforms and their effects, employing quasi-experimental methods. Findings suggest heterogeneous effects both across countries and outcomes. On average, value-for-money improves by 2.8% or 1.7 billion EUR over a decade, while outputs and processes change only marginally. Recently agencified organizations barely improve their performance, while older agencies achieve substantial improvements. The three countries' heterogeneous administrative contexts play a critical role as mediating factors, with the biggest changes occurring in higher new public management take-up countries.