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Municipal Government Approaches to Service Delivery: An Analysis from a Transactions Cost Perspective

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  • Nelson, Michael A

Abstract

Municipal governments are less likely to contract out for service delivery if citizen preferences for the service are heterogeneous. This conclusion is based on an analysis that extends to the public sector the empirical industrial organization literature on transaction costs and the 'make or buy' decision faced by private firms. Service delivery practices for sixty-three municipal services are examined. The findings are consistent with the proposition that the cost of writing and monitoring contracts may be an important consideration in municipal service delivery approach and that bureaucratic supply may not be as inefficient as some previous studies indicate. Copyright 1997 by Oxford University Press.

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Bibliographic Info

Article provided by Western Economic Association International in its journal Economic Inquiry.

Volume (Year): 35 (1997)
Issue (Month): 1 (January)
Pages: 82-96

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Handle: RePEc:oup:ecinqu:v:35:y:1997:i:1:p:82-96

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Cited by:
  1. Germ� Bel & Xavier Fageda & Mildred E. Warner, 2010. "Is private production of public services cheaper than public production? A meta-regression analysis of solid waste and water services," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 29(3), pages 553-577.
  2. Macauley, Molly & Walls, Margaret & Anderson, Soren, 2002. "The Organization of Local Solid Waste and Recycling Markets: Public and Private Provision of Services," Discussion Papers dp-02-35-rev, Resources For the Future.
  3. Ohlsson, H., 1998. "Ownership and Production Costs Choosing Between Public Production and Contracting Out," Papers 1998-6, Uppsala - Working Paper Series.
  4. Laurie Bates & Becky Lafrancois & Rexford Santerre, 2011. "An empirical study of the consolidation of local public health services in Connecticut," Public Choice, Springer, vol. 147(1), pages 107-121, April.
  5. Levin, Henry M., 2012. "Some economic guidelines for design of a charter school district," Economics of Education Review, Elsevier, vol. 31(2), pages 331-343.
  6. Mildred E. Warner, 2012. "Does Local Government Size Matter? Privatization and Hybrid Systems of Local Service Delivery," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1212, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  7. Germa Bel & Xavier Fageda, 2008. "Reforming the local public sector: economics and politics in privatization of water and solid waste," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 11(1), pages 45-65.
  8. Hakam Kamleh, 2005. "La nouvelle organisation ferroviaire britannique : sur la frontière entre intégration et désintégration," CAE Working Papers 28, Aix-Marseille Université, CERGAM.
  9. Germà Bel & Xavier Fageda & Melania Mur, 2010. "¿Por qué se privatizan servicios en los municipios (pequeños)? Evidencia empírica sobre residuos sólidos y agua," Hacienda Pública Española, IEF, vol. 192(1), pages 33-58, March.
  10. Walls, Margaret, 2003. "How Local Governments Structure Contracts with Private Firms: Economic Theory and Evidence on Solid Waste and Recycling Contracts," Discussion Papers dp-03-62, Resources For the Future.
  11. Germà Bel & Xavier Fageda, 2006. "Factors explaining local privatization: A meta-regression analysis," Working Papers CREAP2006-03, Xarxa de Referència en Economia Aplicada (XREAP), revised Oct 2006.
  12. Bertacchini, Enrico & Dalle Nogare, Chiara, 2013. "Public Provision vs Outsourcing of Cultural Services: Evidence from Italian Cities," EBLA Working Papers 201302, University of Turin.
  13. Germà Bel & Xavier Fageda & Melania Mur, 2011. "Why do municipalities cooperate to provide local public services? An empirical analysis," IREA Working Papers 201118, University of Barcelona, Research Institute of Applied Economics, revised Oct 2011.
  14. Xavier Fageda & Germa Bel, 2008. "Local privatization, intermunicipal cooperation,transaction costs and political interests: Evidence from Spain," IREA Working Papers 200804, University of Barcelona, Research Institute of Applied Economics, revised Apr 2008.

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