Child Welfare Contracting: Market Forces and Leverage

In this article, we examine patterns of privatization in the Illinois child welfare system using data from state payment records and a survey of organizational providers. We describe the state contract system and show which providers are active in it and how important they are to the state agency involved. We hypothesize (1) that market forces will favor those providers that match most closely the needs of the state agency for specific expertise and (2) that power and leverage will operate to favor those who can bring the most resources to bear on contract negotiations. Multiple regression analysis shows support for both hypotheses.