Key points are not available for this paper at this time.
Abstract: An important decision confronting public managers is choosing when to contract for service delivery. We focus on two service characteristics that transaction cost theory suggests may influence the chances of contract success. Asset specificity is the extent to which resources applied to delivering a service can be applied to other services and ease of measurement is the extent to which the quality and quantity of service outcomes and outputs can be easily gauged. Drawing on a survey of public managers ’ perceptions of these dimensions for sixty-four common municipal services, we review previous studies of contracting to investigate how these two transaction costs factors influence governments’ decisions about whether to contract, how to manage contracts, and when contracting is likely to be successful. Our survey and review sheds light on how public managers should manage contracting and how scholars should further investigate this important subject.
Brown et al. (Mon,) studied this question.