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Contracting out, an Empirical Study on Motives

Author

Listed:
  • Mattheus Wassenaar

    (Ministry of Social Affairs and Employment, and VU University Amsterdam)

  • Tom Groot

    (VU University Amsterdam)

  • Raymond Gradus

    (VU University Amsterdam)

Abstract

Municipalities may have various motives for decisions on the mode of their task execution. Empirical studies – based on both public choice and transaction costs theory - have not yet provided a fully comprehensive explanation for municipal contracting out decisions. Therefore, we held interviews with Dutch municipal managers about the motives for the actual mode of service provision. This study provided the opportunity to investigate the relevance of motives on contracting out, to explore of additional motives and to test these statistically. As we find, municipalities do not regularly evaluate the service provision of their activities. Only in case of structural underperformance, municipalities consider a change of service provider, and then, the efficiency motive is most relevant. However, we conclude that institutional motives – as the stability of service provision - are relevant for contracting out decisions as well.

Suggested Citation

  • Mattheus Wassenaar & Tom Groot & Raymond Gradus, 2010. "Contracting out, an Empirical Study on Motives," Tinbergen Institute Discussion Papers 10-121/3, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20100121
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    Citations

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    Cited by:

    1. Germà Bel & Mildred E. Warner, 2016. "Factors explaining inter-municipal cooperation in service delivery: a meta-regression analysis," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 19(2), pages 91-115, April.
    2. E. Dijkgraaf & R. Gradus, 2011. "Efficiency Effects of Privatising Refuse Collection: Be careful and Alternatives present," Tinbergen Institute Discussion Papers 11-156/3, Tinbergen Institute.
    3. Reppert, Thorsten, 2023. "Local-level ownership of electricity grids: An analysis of Germany's distribution system operators (DSOs)," Utilities Policy, Elsevier, vol. 85(C).
    4. Tatiana-Camelia DOGARU, 2014. "Contracting Out The Pensions System In Romania," Management and Marketing Journal, University of Craiova, Faculty of Economics and Business Administration, vol. 0(1), pages 91-102, May.
    5. Mattheus Wassenaar & Raymond Gradus & Toon Molleman, 2017. "Public vs Nonprofit Incarceration: The Case of The Netherlands," Tinbergen Institute Discussion Papers 17-023/VIII, Tinbergen Institute.

    More about this item

    Keywords

    Contracting out; municipalities; institutional theory; motives;
    All these keywords.

    JEL classification:

    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights

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