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Problems with contracting out government services: lessons from orderly services at SCGH

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  • Anthony E. Boardman
  • Erica Susan Hewitt

Abstract

This paper identifies and discusses the problems associated with contracting out labor-intensive government services. It examines in detail the contracting out of the orderly service at Sir Charles Gairdner Hospital (SCGH) in Western Australia and its subsequent return to in-house delivery. When the orderly service was contracted out, the result was poor in terms of cost, quality and externalities. Subsequent return of the service to in-house provision reduced costs and improved quality. The problems that led to failure of contracting out and subsequent success of in-house provision can be explained in terms of transaction cost economics. Copyright 2004, Oxford University Press.

Suggested Citation

  • Anthony E. Boardman & Erica Susan Hewitt, 2004. "Problems with contracting out government services: lessons from orderly services at SCGH," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 13(6), pages 917-929, December.
    • Handle: RePEc:oup:indcch:v:13:y:2004:i:6:p:917-929
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    Cited by:

    1. Jean-Etienne de Bettignies & Thomas W. Ross, 2010. "The Economics of Public–Private Partnerships: Some Theoretical Contributions," Chapters, in: Graeme A. Hodge & Carsten Greve & Anthony E. Boardman (ed.), International Handbook on Public–Private Partnerships, chapter 7, Edward Elgar Publishing.
    2. Geddes, R. Richard & Reeves, Eoin, 2017. "The favourability of U.S. PPP enabling legislation and private investment in transportation infrastructure," Utilities Policy, Elsevier, vol. 48(C), pages 157-165.
    3. Krug, Gerhard & Stephan, Gesine, 2013. "Is the Contracting-Out of Intensive Placement Services More Effective than Provision by the PES? Evidence from a Randomized Field Experiment," IZA Discussion Papers 7403, Institute of Labor Economics (IZA).
    4. Anthony E. Boardman & Aidan R. Vining, 2010. "Assessing the Economic Worth of Public–Private Partnerships," Chapters, in: Graeme A. Hodge & Carsten Greve & Anthony E. Boardman (ed.), International Handbook on Public–Private Partnerships, chapter 8, Edward Elgar Publishing.

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