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A simple estimation method for aggregate government outsourcing

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  • Stephen Minicucci

    (Consortium on Financing Higher Education, Cambridge, Massachusetts)

  • John D. Donahue

    (Collaborative Governance, John F. Kennedy School of Government, Harvard University)

Abstract

The scholarly and popular debate on the delegation to the private sector of governmental tasks rests on an inadequate empirical foundation, as no systematic data are collected on direct versus indirect service delivery. We offer a simple method for approximating levels of service outsourcing, based on relatively straightforward combinations of and adjustments to standard statistical series, primarily the National Income and Product Account and the Government Finances series produced by the Department of Commerce. The method permits us to separately estimate state and local from federal service outsourcing and (within the federal government) to distinguish between defense and non-defense services. Alternative estimates, both including and excluding Medicare and Medicaid, are included, as are estimates of outsourcing from 1959 through 2000. The method confirms the general view that the privately provided share of public services has increased, particularly in the last two decades of the past century. But this increase has been shallower than many observers suggest, and as of 2000 more than two-thirds of the government's service budget was still devoted to employee compensation. © 2004 by the Association for Public Policy Analysis and Management.

Suggested Citation

  • Stephen Minicucci & John D. Donahue, 2004. "A simple estimation method for aggregate government outsourcing," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 23(3), pages 489-507.
  • Handle: RePEc:wly:jpamgt:v:23:y:2004:i:3:p:489-507
    DOI: 10.1002/pam.20023
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    References listed on IDEAS

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    1. Florencio Lopez-de-Silanes & Andrei Shleifer & Robert Vishny, 1997. "Privatization in the United States," RAND Journal of Economics, The RAND Corporation, vol. 28(3), pages 447-471, Autumn.
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    Cited by:

    1. Alonso, José M. & Clifton, Judith & Díaz-Fuentes, Daniel, 2017. "The impact of government outsourcing on public spending: Evidence from European Union countries," Journal of Policy Modeling, Elsevier, vol. 39(2), pages 333-348.
    2. Mar Delgado-Téllez & José Federico Geli & Enrique Moral-Benito & Javier J. Pérez, 2022. "Outsourcing and public expenditure: an aggregate perspective with regional data," Regional Studies, Taylor & Francis Journals, vol. 56(8), pages 1347-1358, August.
    3. José M. Alonso & Judith Clifton & Daniel Díaz-Fuentes, 2015. "Did New Public Management Matter? An empirical analysis of the outsourcing and decentralization effects on public sector size," Public Management Review, Taylor & Francis Journals, vol. 17(5), pages 643-660, May.
    4. Belev, Sergei (Белев, Сергей) & Zolotareva, Anna (Золотарев, Анна) & Malayrev, Aleksandr (Малайрев, Александр) & Sokolov, Ilya (Соколов, Илья), 2015. "Structural Alternatives to the Tax Administration [Структурные Альтернативы Налогового Администрирования]," Published Papers mn13, Russian Presidential Academy of National Economy and Public Administration.
    5. Germa Bel & Anton Costas, 2004. "Do public sector reforms get rusty? An empirical analysis on privatization of solid waste collection," Public Economics 0409014, University Library of Munich, Germany.

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