Municipalities' Contracting Out Decisions: An Emperical Study on Motives

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

Municipalities have various motives behind their decisions about the modes of their task execution. Empirical studies have not yet provided a fully satisfying explanation for municipalities' contracting out decisions. Therefore, we interviewed several Dutch principal municipal managers to evaluate the causes and motives for the choices of the current structures for the delivery of their services. This study investigates the relevance of common public choice and transaction cost motives on contracting out and explores the relevance of additional institutional and pragmatic motives. We found that municipalities do not regularly evaluate the service provision of their activities and the potential benefits of outsourcing. In fact, if the activity has an adequate performance level and complaints from municipal employees, local politicians or inhabitants do not occur, a catalyst for a discussion on the contracting out of this activity is, in general, lacking. Principally in the case of structural underperformance municipalities consider a change of service provider, and then the efficiency motive is most relevant. Thereby, institutional motives-such as the stability of service provision-and pragmatic motives are also relevant. Institutional pressures in particular initiate the evaluation of organisational performance, whereas both economic motives as institutional and pragmatic motives are used to compare alternative service providers. © 2013 Copyright Taylor and Francis Group, LLC.
Original languageEnglish
Pages (from-to)414-434
Number of pages21
JournalLocal Government Studies
Volume39
Issue number3
DOIs
Publication statusPublished - 2013

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municipality
service provision
outsourcing
transaction cost
pragmatics
service provider
catalyst
local politician
decision
public choice
economics
transaction costs
services
complaint
inhabitant
performance
employee
manager
efficiency
cause

Cite this

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title = "Municipalities' Contracting Out Decisions: An Emperical Study on Motives",
abstract = "Municipalities have various motives behind their decisions about the modes of their task execution. Empirical studies have not yet provided a fully satisfying explanation for municipalities' contracting out decisions. Therefore, we interviewed several Dutch principal municipal managers to evaluate the causes and motives for the choices of the current structures for the delivery of their services. This study investigates the relevance of common public choice and transaction cost motives on contracting out and explores the relevance of additional institutional and pragmatic motives. We found that municipalities do not regularly evaluate the service provision of their activities and the potential benefits of outsourcing. In fact, if the activity has an adequate performance level and complaints from municipal employees, local politicians or inhabitants do not occur, a catalyst for a discussion on the contracting out of this activity is, in general, lacking. Principally in the case of structural underperformance municipalities consider a change of service provider, and then the efficiency motive is most relevant. Thereby, institutional motives-such as the stability of service provision-and pragmatic motives are also relevant. Institutional pressures in particular initiate the evaluation of organisational performance, whereas both economic motives as institutional and pragmatic motives are used to compare alternative service providers. {\circledC} 2013 Copyright Taylor and Francis Group, LLC.",
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Municipalities' Contracting Out Decisions: An Emperical Study on Motives. / Groot, T.L.C.M.; Wassenaar, M.C.; Gradus, R.H.J.M.

In: Local Government Studies, Vol. 39, No. 3, 2013, p. 414-434.

Research output: Contribution to JournalArticleAcademicpeer-review

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AB - Municipalities have various motives behind their decisions about the modes of their task execution. Empirical studies have not yet provided a fully satisfying explanation for municipalities' contracting out decisions. Therefore, we interviewed several Dutch principal municipal managers to evaluate the causes and motives for the choices of the current structures for the delivery of their services. This study investigates the relevance of common public choice and transaction cost motives on contracting out and explores the relevance of additional institutional and pragmatic motives. We found that municipalities do not regularly evaluate the service provision of their activities and the potential benefits of outsourcing. In fact, if the activity has an adequate performance level and complaints from municipal employees, local politicians or inhabitants do not occur, a catalyst for a discussion on the contracting out of this activity is, in general, lacking. Principally in the case of structural underperformance municipalities consider a change of service provider, and then the efficiency motive is most relevant. Thereby, institutional motives-such as the stability of service provision-and pragmatic motives are also relevant. Institutional pressures in particular initiate the evaluation of organisational performance, whereas both economic motives as institutional and pragmatic motives are used to compare alternative service providers. © 2013 Copyright Taylor and Francis Group, LLC.

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