The Effects of Administrative Professionals on Contracting Out

An often‐debated subject in the public administration literature concerns why some units contract out more than others. The present article decomposes the influence of public employees on municipal contracting as different types of employees have different skills and incentives and must be treated accordingly. First, the analysis shows that the apparent negative relationship between public employees in general and municipal contracting is partly reflecting the fact that the number of public employees is endogenous to contracting. Second, we suggest that administrative professionals and not bureaucrats in general have a positive impact on contracting. This is because administrative professional skills are vital for carrying out a tender and because contracting is essentially a part of administrative professionals' bureau‐shaping interests. Finally, we find support for two often‐discussed claims in the literature, namely, the influence of prosperity and ideology.