Australian Public‐Sector Outsourcing in the ‘Golden Era’: Cost Savings Evidence or Anecdote?

This paper reports a multi‐method study of the watershed period of Australian public‐sector outsourcing from the mid‐1990s to 2000. Interviews and a large‐scale survey conducted with Australian public‐sector managers indicate a number of shortfalls in decision‐making and decision‐evaluation processes from accounting and policy compliance perspectives. The results suggest that the cost‐savings objective was given a low level of importance, that transaction‐cost data were rarely used in decision‐making, and that ex‐post decision evaluation of the cost outcomes from outsourcing was minimal. These results are also reinterpreted and implications drawn in light of the current contracting practices of Australian public‐sector organisations .