A Difficult Act to Balance: Political Costs and Economic Costs in the Public Sector

Most governments in welfare societies face the problem of how to keep the costs of running public services (economic costs) at a minimum without damaging their political position (political costs). This paper draws upon recent reforms in the British National Health Service (the 1997 White Paper) to demonstrate this tension between political costs and economic costs, and also alludes to some of the consequences of these reforms. The paper argues that the difficult balancing act between political costs and economic costs is strongly influenced by government ideology towards the public sector. The paper concludes by appealing for 'responsible' political rhetoric that sets more realistic and achievable targets for public sector reforms, instead of the overstated claims made by politicians across the political divide