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Contracting Out: Promise and Performance

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  • John Quiggin

Abstract

In this paper, it is argued that the benefits of competitive tendering and contracting have been overestimated, and that many of the apparent benefits actually reflect transfers rather than efficiency gains. Moreover, if arrangements for competitive tendering and contracting yield an inappropriate allocation of risk, such policies can reduce welfare rather than enhancing it as is commonly claimed. A number of case studies are presented to illustrate the latter proposition. Finally, some recommendations are presented for improvements in policy with respect to competitive tendering and contracting.

Suggested Citation

  • John Quiggin, 2002. "Contracting Out: Promise and Performance," The Economic and Labour Relations Review, , vol. 13(1), pages 88-104, June.
    • Handle: RePEc:sae:ecolab:v:13:y:2002:i:1:p:88-104
    DOI: 10.1177/103530460201300105
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    References listed on IDEAS

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    1. Domberger, S & Meadowcroft, S & Thompson, D, 1987. "The impact of competitive tendering on the costs of hospital domestic services," Fiscal Studies, Institute for Fiscal Studies, vol. 8(4), pages 39-54, November.
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    Cited by:

    1. Paul H. Jensen & Robin E. Stonecash, 2004. "The Efficiency of Public Sector Outsourcing Contracts: A Literature Review," Melbourne Institute Working Paper Series wp2004n29, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    2. Phillip Toner, 2014. "Contracting out publicly funded vocational education: A transaction cost critique," The Economic and Labour Relations Review, , vol. 25(2), pages 222-239, June.
    3. Neal Ryan & Craig Furneaux & Anthony Pink & Kerry Brown, 2005. "Public Sector Contracting: An Australian Study of Changing Work Conditions," management revue - Socio-Economic Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 16(4), pages 438-457.
    4. Changhee Kim & Hyunjung Kim & Kanghwa Choi, 2020. "Efficiency Analysis of Public Library Services Based on Establishing Entity and Outsourcing," Sustainability, MDPI, vol. 12(21), pages 1-15, November.
    5. Paul H. Jensen & Robin E. Stonecash, 2005. "Incentives and the Efficiency of Public Sector‐outsourcing Contracts," Journal of Economic Surveys, Wiley Blackwell, vol. 19(5), pages 767-787, December.

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