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Competitive Tendering in UK Health and Local Authorities: What Happens to the Quality of Services?

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  • McMaster, Robert

Abstract

This paper analyzes the effects on the quality of U.K. health and local authority services arising from the substitution of contract governance for direct provision. Empirical studies of contract provision tend to be confined to estimating cost savings. The paper assumes that transaction benefits as well production and transaction costs are pertinent to governance choice. Quality is assumed to be a benefit generated by health and local authorities. An ordered-probit model is presented and predicts that service quality is sensitive to governance adjustments; implying that the case for contracting services is not as clear cut as its advocates suggest. Copyright 1995 by Scottish Economic Society.

Suggested Citation

  • McMaster, Robert, 1995. "Competitive Tendering in UK Health and Local Authorities: What Happens to the Quality of Services?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 42(4), pages 409-427, November.
    • Handle: RePEc:bla:scotjp:v:42:y:1995:i:4:p:409-27
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    Cited by:

    1. Nick Adnett, 1998. "The Acquired Rights Directive and Compulsory Competitive Tendering in the UK: An Economic Perspective," European Journal of Law and Economics, Springer, vol. 6(1), pages 69-81, July.
    2. Robin G. Milne, 1997. "Market-type Mechanisms, Market Testing and Market Making: A Longitudinal Study of Contractor Interest in Tendering," Urban Studies, Urban Studies Journal Limited, vol. 34(4), pages 543-559, April.
    3. Maria Goddard & Russell Mannion, 1998. "From competition to co‐operation: new economic relationships in the National Health Service," Health Economics, John Wiley & Sons, Ltd., vol. 7(2), pages 105-119, March.
    4. Yu-Chen Lin & Chiang-Ming Chen, 2014. "Research Note: Service Quality and Market Structure in the International Tourist Hotel Industry," Tourism Economics, , vol. 20(3), pages 647-654, June.
    5. Robin G. Milne & Robert E. Wright, 2004. "Competition and Costs: Evidence from Competitive Tendering in the Scottish National Health Service," Scottish Journal of Political Economy, Scottish Economic Society, vol. 51(1), pages 1-23, February.
    6. S J Bailey & C Davidson, 1999. "The Purchaser—Provider Split: Theory and UK Evidence," Environment and Planning C, , vol. 17(2), pages 161-175, April.
    7. Roxana Gutiérrez-Romero & Dirk Haubrich & Iain McLean, 2008. "The Limits of Performance Assessments of Public Bodies: External Constraints in English Local Government," Environment and Planning C, , vol. 26(4), pages 767-787, August.
    8. Koukiadaki, Aristea, 2012. "EU governance and social services of general interest: When even the UK is concerned," European Integration online Papers (EIoP), European Community Studies Association Austria (ECSA-A), vol. 16, February.

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