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CONTRACTING FOR GOVERNMENT SERVICES: THEORY AND EVIDENCE FROM U.S. CITIES *
Author(s) -
LEVIN JONATHAN,
TADELIS STEVEN
Publication year - 2010
Publication title -
the journal of industrial economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.93
H-Index - 77
eISSN - 1467-6451
pISSN - 0022-1821
DOI - 10.1111/j.1467-6451.2010.00430.x
Subject(s) - government (linguistics) , business , contracting out , politics , administration (probate law) , service (business) , construct (python library) , public economics , service provider , local government , private sector , public sector , public administration , finance , marketing , economics , economic growth , political science , economy , business administration , philosophy , linguistics , computer science , law , programming language
Local governments can provide services with their own employees or by contracting with private or public sector providers. We develop a model of this ‘make‐or‐buy’ choice that highlights the trade‐off between productive efficiency and the costs of contract administration. We construct a dataset of service provision choices by U.S. cities and identify a range of service and city characteristics as significant determinants of contracting decisions. Our analysis suggests an important role for economic efficiency concerns, as well as politics, in contracting for government services.