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Outsourcing Public Services: Contractibility, Cost, and Quality

Fredrik Andersson (), Henrik Jordahl () and Jens Josephson ()
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Fredrik Andersson: Lund University, Postal: Lund University, Department of Economics, Box 117, SE-221 00, Lund, Sweden, Sweden, https://www.lunduniversity.lu.se/lucat/user/f5c5daa256209df9f713f2648ef1f6de

No 2019:4, Working Papers from Örebro University, School of Business

Abstract: We review the literature on public sector outsourcing to explore if the theoretical predictions from the incomplete contracts literature hold up to recent empirical evidence. Guided by theory, we arrange services according to the type and magnitude of their contractibility problems. The empirical studies point at rather favourable outsourcing outcomes, in terms of costs and quality, for services without severe contracting problems. The picture is more mixed for services with tougher contracting problems, with the weight of the evidence in favour of public provision. This difference between services is largely in line with the property-rights framework and theories of incomplete contracts.

Keywords: privatization; property rights; publicly provided goods (search for similar items in EconPapers)
JEL-codes: D23 H11 L33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cta
Date: 2019-05-29
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