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Managing contract performance: A transaction costs approach

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  • Trevor L. Brown

    (School of Public Policy and Management, The Ohio State University, Columbus)

  • Matthew Potoski

    (Department of Political Science, Iowa State University, Ames)

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    Abstract

    Managing contracts is a complex process, often exacerbated by high transaction costs inherent in negotiating, implementing, and monitoring contract relationships with vendors. Through analyses of data from a 1997 International City|County Management Association survey of municipal and county governments, the way in which municipal and county governments respond to transaction cost factors inherent in contract service delivery is examined. The results of the analyses demonstrate that when governments contract for services in contexts that risk contract failure, they engage in a variety of monitoring techniques to improve their ability to monitor and correct vendor performance. © 2003 by the Association for Public Policy Analysis and Management.

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    File URL: http://hdl.handle.net/10.1002/pam.10117
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    Bibliographic Info

    Article provided by John Wiley & Sons, Ltd. in its journal Journal of Policy Analysis and Management.

    Volume (Year): 22 (2003)
    Issue (Month): 2 ()
    Pages: 275-297

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    Handle: RePEc:wly:jpamgt:v:22:y:2003:i:2:p:275-297

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    Web page: http://www3.interscience.wiley.com/journal/34787/home

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    1. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
    2. Riordan, Michael H. & Williamson, Oliver E., 1985. "Asset specificity and economic organization," International Journal of Industrial Organization, Elsevier, vol. 3(4), pages 365-378, December.
    3. James Buchanan, 1971. "Principles of urban fiscal strategy," Public Choice, Springer, vol. 11(1), pages 1-16, September.
    4. Mildred Warner & Robert Hebdon, 2001. "Local Government Restructuring: Privatization and Its Alternatives," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 20(2), pages 315-336.
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    Cited by:
    1. Germà Bel & Xavier Fageda & Melania Mur, 2011. "Privatization, cooperation and costs of solid waste services in small towns," IREA Working Papers 201111, University of Barcelona, Research Institute of Applied Economics, revised Jul 2011.
    2. 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.
    3. E. Dijkgraaf & R. Gradus, 2011. "Efficiency Effects of Privatising Refuse Collection: Be careful and Alternatives present," Tinbergen Institute Discussion Papers 11-156/3, Tinbergen Institute.
    4. Germa Bel & Anton Costas, 2006. "Do Public Sector Reforms Get Rusty? Local Privatization in Spain," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 9(1), pages 1-24.
    5. David, Guy & Chiang, Arthur J., 2009. "The determinants of public versus private provision of Emergency Medical Services," International Journal of Industrial Organization, Elsevier, vol. 27(2), pages 312-319, March.
    6. Pierre Koning & C.J. Heinrich, 2009. "Cream-skimming, parking and other intended and unintended effects of performance-based contracting in social welfare services," CPB Discussion Paper 134, CPB Netherlands Bureau for Economic Policy Analysis.
    7. Matthew Holian, 2009. "Outsourcing in US cities, ambulances and elderly voters," Public Choice, Springer, vol. 141(3), pages 421-445, December.
    8. Daniel Albalate & Germà Bel & Xavier Fageda, 2012. "“Beyond pure public and pure private management models: Mixed firms in the European Airport Industry”," IREA Working Papers 201221, University of Barcelona, Research Institute of Applied Economics, revised Dec 2012.
    9. Germà Bel & Jordi Rosell, 2014. "“Public and Private Production in a Mixed Delivery System: Regulation, Competition and Costs”," IREA Working Papers 201418, University of Barcelona, Research Institute of Applied Economics, revised May 2014.
    10. Germà Bel & Xavier Fageda, 2008. "Privatization and competition in the delivery of local services: An empirical examination of the dual market hypothesis," Working Papers XREAP2008-04, Xarxa de Referència en Economia Aplicada (XREAP), revised Apr 2008.
    11. 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.
    12. Miguel Cruz, Antonio & Maria Rios Rincon, Adriana, 2012. "Medical device maintenance outsourcing: Have operation management research and management theories forgotten the medical engineering community? A mapping review," European Journal of Operational Research, Elsevier, vol. 221(1), pages 186-197.

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