Outsourcing Public Services: Contractibility, Cost, and Quality

Fredrik Andersson, Henrik Jordahl, Jens Josephson

Research output: Contribution to journalReview articlepeer-review

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.
Original languageEnglish
Pages (from-to)349–372
Number of pages24
JournalCESifo Economic Studies
Volume65
Issue number4
Early online date2019 Jun
DOIs
Publication statusPublished - 2019 Dec

Subject classification (UKÄ)

  • Public Administration Studies

Free keywords

  • Contracts
  • Public services

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