Policy Feedback and Public Opinion : The impact of Swedish welfare reforms on public attitudes to privatisation

Abstract: The concept policy feedback is the idea that policies themselves may be political forces. Instead of the traditional approach of analysing policy as the conclusion of a political process, policy feedback suggests that the relationship between policy and public opinion is reciprocal. Many authors have stressed the methodological challenges related to estimating policy feedback effects due to the risk of reverse causal pathways: how do we make causal inferences, when the policy itself is probably a function of public opinion? I study public attitude toward privatisation following two Swedish welfare reforms (Friskolereformen and Lagen om Valfrihetssystem) that both resulted in an expansion of private service providers in the Swedish welfare sector. I exploit the variation in municipalities that did and did not adopt the two policies, together with the variation in timing of their adoption across municipalities. By applying a staggered difference-in-differences design, I isolate the causal effect of the welfare reforms on public preference for privatisation thereby avoiding the issue of reverse causality. This thesis provides a causal link between policy adoption and public opinion, suggesting that the policies themselves can be an important factor that shape public opinion on privatisation. The overall results support the existence of policy feedback effects, but do not indicate any recurring direction of such effects.