The UK government's public-service reforms have been at the center of media controversy in recent months, but behind the headlines what is going on? The global context of public-service reform may provide the answer. In every developed country, the central issue is the same: people want higher standards and better customer service, but they do not want to pay higher taxes. Governments therefore face a productivity imperative, and three models for meeting this challenge have emerged.

The first model is command and control: literacy in primary schools (in Prime Minister Tony Blair's first term) and health care waiting times (in his second) are illustrations. This approach is often essential for a service that needs to improve from awful to adequate. For a government, this is a big achievement, but the public wants services to go from good to great. While you can mandate adequate performance, you cannot mandate greatness. It has to be unleashed. This is why other models of reform are required.

So the second model is to create quasi-markets, as the current health and education reforms in the United Kingdom did by devolving responsibility to schools, general practitioners, and foundation hospitals (which are part of the UK's National...