Reinventing government in Iceland: A case study of public management reform

Date of Completion

January 2002


Political Science, Public Administration




Public management reform has been a political priority in governments worldwide in the last two decades, a response to economic and administrative problems in the period. It has also been a reaction to ideas which have come in vogue for both diagnosing the problems of government and providing solutions. The problems identified involve the growing cost of the public sector and an inefficient and unresponsive bureaucracy. The solutions offered focus on ensuring efficiency, effectiveness and flexibility by transferring government activities to the competitive marketplace through privatization or by adopting a market mechanism within government. ^ The international attention given to public management reform has also reached the academic agenda, reflected in the number of articles published in the leading scholarly journals. The literature has identified both theoretical flaws and potential limitations in the application of current governmental reform. The literature, however, does not provide voluminous empirical data on its effects. ^ This study is an effort to help fill this research gap. The research objective was to provide multi-source case study data on the significance of governmental reform in Iceland during the period 1993–2000 and to determine how various situational factors, such as administrative characteristics, reform management capacity and experiential learning efforts, contributed to the outcome. The subject is analyzed in terms of the academic discussion on government reform, primarily the theoretical background of the market governance model: the public choice and agent theories, and managerialism. The findings indicate that the likelihood of governmental reform to work as intended is subject to a number of interrelated factors, including the ideological or pragmatic approach of the policy, how the reforms “fit” the administrative characteristics of the particular organization, the degree of political and administrative commitment, and the effort of experiential learning during policy implementation. ^