Value Extraction in Italian Social Services. Economic and Political Capital Accumulation in a Quasi-Market
The paper is divided in two sections.
The first section deals with the evolution of social policies in Italy towards a market model that will be analysed through secondary data – mainly deriving from the national industry and services census, and on the national survey on social services – and document analysis. This overview will outline the changing balance between public sector, non-profit organizations and private companies at national and regional level. Together with the quantitative dimension of state retrenchment and market growth, the changing role of the actors will be described. Laws and planning documents endorse a new role for the public sector, which is no longer financier and manager of services, but is increasingly identified as a mediator or facilitator of the encounter between demand and supply. At the same time, a growing attention towards the so called social entrepreneurship is clearly visible in the political discourse. In fact the government is actually working on a reform of the national law on social enterprise meant to empower the development of a social investment market, which allows the sharing of profits among investors.
The second section will offer an in depth analysis of the structure of the social services’ market, of the extractive dynamics and of their consequences, by focusing on a regional case study, namely that of Piemonte, that will be analysed through different techniques.
The first step of the analysis consists in defining the process of marketization in its various forms. Indeed, even if several social benefits which were provided by public institutions in the past are now delivered by private actors, various forms of co-management are emerging, and the economic resources which are employed in services are even now mainly public. In this regard, three trends can be traced through the analysis of administrative databases at regional level. The first is the growing outsourcing of public services: in this case the ownership and the resources are still public, but the services are managed by non-profit organizations and market players. The second trend is the increasing direct public funding of non-profit organizations which establish and manage their own initiatives in the field of social policies using public funds. Finally, the third relevant trend is the enlargement of the market of private services. Even in this case, however, the public sector plays a pivotal role. In fact most of the economic resources spent in this market come from public transfers directly to citizens through pensions or subsidies. For this reason, social services can be better defined in terms of “quasi-market”. The reliance of market and non-profit organizations on external funding, that most of the time comes in form of project financing, is one of the main reasons of the market failure. In-depth interviews with actors reveal that the instability of the resource flow deeply limits the capability of long term planning, inhibiting innovation and determining an increase in levels of precarity among workers.
Workers are not only among the major victims of market failures, but they are one of the crucial nodes of the process of value extraction. If in the first stages of the development of the market profits were produced mainly by reducing the quality of services, lowering the cost of labour seems to be an even more important lever nowadays. In fact, this reduction in market and non-profit organizations is one of the main instruments to enhance their competitiveness and to promote and justify outsourcing of public services as a way of containing costs. Workers, therefore, join the services users in paying the price of marketization.
The extractive dynamics centred on labour cost and services quality and/or price determine at least three different models, according to the purpose and the kind of value extracted. First, we can observe a standard extraction model of the economic value. In this case, market players and non-profit organizations improve their margins by hitting on consumers and suppliers of the social services, as occurs in many other markets. Second, there is what can be called an economic redistributive model, in which the cost savings are functional to maintain services that otherwise would be eliminated or resized, given the continuing shortage of public resources. Third, we can outline a peculiar situation, in which a kind of resource other than the economic one is taken out from the value chain. In fact, social services can be conceived as a field where to build political and social capital, which may be used both to better manage the services system and, to a lesser extent, to pursue an individual career in the political arena. Non-profit organizations and market actors can indeed shape and exploit their structural position in the field in order to provide system stability and their own survival, thus compensating for market failures. We will deepen these dynamics carrying out a network analysis on a complete dataset of the non-profit organizations in Piemonte, their organization chart, the profile and career of their leaders.