Outsourcing Public Services: Contractibility, Cost, and Quality

Research output: Contribution to journalArticle

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.

Details

Authors
Organisations
External organisations
  • Research Institute of Industrial Economics
Research areas and keywords

Subject classification (UKÄ) – MANDATORY

  • Economics and Business

Keywords

  • Contracts, Public services
Original languageEnglish
JournalCESifo Economic Studies
Publication statusE-pub ahead of print - 2019 Jun
Publication categoryResearch
Peer-reviewedYes