Risk and Resilience: Managing Public Transit Contracting During a Disrupted Market

This study examines the contracting behavior of U.S. transit agencies during the COVID-19 pandemic to assess two competing predictions: (1) New Public Management expects increased contracting to achieve cost savings and shift risk, and (2) institutional inertia predicts stability due to structural barriers. Our findings demonstrate overwhelming support for institutional inertia. Despite confirming the pandemic was a major disruption, contracting behavior and perceptions remained stable. The mechanism for this inertia is that contracting is not associated with improved operational outcomes, suggesting the absence of economic incentives for change. The stability observed reflects externally insulated resilience of core public management structures.