Abstract Capturing the benefits of competition is a key argument for outsourcing public services, yet public service markets often lack sufficient competition. The authors use survey and interview data from U.S. local governments to explore the responses of public managers to noncompetitive markets. This research indicates that competition is weak in most local government markets (fewer than two alternative providers on average across 67 services measured), and that the relationship between competition and contracting choice varies by service type. Public managers respond to suboptimal market competition by intervening with strategies designed to create, sustain, and enhance provider markets. In monopoly service markets, managers are more likely to use intergovernmental contracting, while for-profit contracting is more common in more competitive service markets. The strategies that public managers employ to build and sustain competition for contracts often require tangible investments of administrative resources that add to the transaction costs of contracting in noncompetitive markets. Show Journal Information Public Administration Review has been the premier journal in the field of public administration research and theory for more than 75 years, and is the only journal in public administration that serves academics, practitioners, and students interested in the public sector and public sector management. Articles identify and analyze current trends, provide a factual basis for decision making, stimulate discussion, and make the leading literature in the field available in an easily accessible format. Publisher Information Wiley is a global provider of content and content-enabled workflow solutions in areas of scientific, technical, medical, and scholarly research; professional development; and education. Our core businesses produce scientific, technical, medical, and scholarly journals, reference works, books, database services, and advertising; professional books, subscription products, certification and training services and online applications; and education content and services including integrated online teaching and learning resources for undergraduate and graduate students and lifelong learners. Founded in 1807, John Wiley & Sons, Inc. has been a valued source of information and understanding for more than 200 years, helping people around the world meet their needs and fulfill their aspirations. Wiley has published the works of more than 450 Nobel laureates in all categories: Literature, Economics, Physiology or Medicine, Physics, Chemistry, and Peace. Wiley has partnerships with many of the world’s leading societies and publishes over 1,500 peer-reviewed journals and 1,500+ new books annually in print and online, as well as databases, major reference works and laboratory protocols in STMS subjects. With a growing open access offering, Wiley is committed to the widest possible dissemination of and access to the content we publish and supports all sustainable models of access. Our online platform, Wiley Online Library (wileyonlinelibrary.com) is one of the world’s most extensive multidisciplinary collections of online resources, covering life, health, social and physical sciences, and humanities. Rights & Usage This item is part of a JSTOR Collection. Abstract What are the costs of the contracting out process? While supporting contracting as a viable tool for public sector managers, Jonas Prager argues the public sector often pays inadequate attention to the costs of managing contracting out and monitoring contractor compliance. Prager contends that government production might be more efficient than outsourcing when these costs overwhelm savings that might otherwise accrue from contracting out. Journal Information Public Administration Review has been the premier journal in the field of public administration research and theory for more than 75 years, and is the only journal in public administration that serves academics, practitioners, and students interested in the public sector and public sector management. Articles identify and analyze current trends, provide a factual basis for decision making, stimulate discussion, and make the leading literature in the field available in an easily accessible format. Publisher Information Wiley is a global provider of content and content-enabled workflow solutions in areas of scientific, technical, medical, and scholarly research; professional development; and education. Our core businesses produce scientific, technical, medical, and scholarly journals, reference works, books, database services, and advertising; professional books, subscription products, certification and training services and online applications; and education content and services including integrated online teaching and learning resources for undergraduate and graduate students and lifelong learners. Founded in 1807, John Wiley & Sons, Inc. has been a valued source of information and understanding for more than 200 years, helping people around the world meet their needs and fulfill their aspirations. Wiley has published the works of more than 450 Nobel laureates in all categories: Literature, Economics, Physiology or Medicine, Physics, Chemistry, and Peace. Wiley has partnerships with many of the world’s leading societies and publishes over 1,500 peer-reviewed journals and 1,500+ new books annually in print and online, as well as databases, major reference works and laboratory protocols in STMS subjects. With a growing open access offering, Wiley is committed to the widest possible dissemination of and access to the content we publish and supports all sustainable models of access. Our online platform, Wiley Online Library (wileyonlinelibrary.com) is one of the world’s most extensive multidisciplinary collections of online resources, covering life, health, social and physical sciences, and humanities. Rights & Usage This
item is part of a JSTOR Collection. What is the purpose or goal of outsourcing and privatization?The rationale for outsourcing is that applying market mechanisms and private sector expertise to the work of government can reduce costs, raise quality and achieve wider benefits such as greater innovation and improved efficiency.
What is the number 1 reason for privatization of public services?Cost reduction is one motivation for privatization. The desire to transfer risk from the public sector to the private sector can lead to privatization. Another rationale for privatization could be as a new source of revenue. A higher level of service can also be a reason.
What are the benefits of using privatization?If structured appropriately and sufficiently monitored, privatization can:. SAVE TAXPAYERS' MONEY.. INCREASE FLEXIBILITY.. IMPROVE SERVICE QUALITY.. INCREASE EFFICIENCY AND INNOVATION.. ALLOW POLICYMAKERS TO STEER, RATHER THAN ROW.. STREAMLINE AND DOWNSIZE GOVERNMENT.. IMPROVE MAINTENANCE.. Why is privatization good for the economy?Privatisation always helps in keeping the consumer needs uppermost, it helps the governments pay their debts, it helps in increasing long-term jobs and promotes competitive efficiency and open market economy.
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Why is privatization Outsourcing seen as an attractive option for the delivery of public services?
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