{"title":"Contracting Out and the Fiscal Sustainability of Public Services","authors":"Cheong-Soo Kim, Taehyon Choi","doi":"10.1080/15309576.2023.2204073","DOIUrl":null,"url":null,"abstract":"Abstract This study explores how contracting out can contribute to the fiscal sustainability of public services. Together with the economic advantage that contracting out can lower production costs over government production in house, contracting theory informs that contracting out can offer an insulation of efficient and effective service production from the political incentive problem of the principal. Hypotheses from the perspective are tested over panel data on subnational public service facilities operated via user fees in South Korea. As hypothesized, the analysis results confirm a positive relationship of contracting out with net revenue over government production. While both regionally/municipally owned corporations (R/MOCs) and nonprofits demonstrate their capabilities as competent partners of a government, nonprofits are more effective at the generation of net revenue. The study discusses the implications of contracting out for publicness and a style of governance that actively utilizes the flexibility and expertise of organizations outside a government.","PeriodicalId":47571,"journal":{"name":"Public Performance & Management Review","volume":null,"pages":null},"PeriodicalIF":2.2000,"publicationDate":"2023-05-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"1","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Public Performance & Management Review","FirstCategoryId":"91","ListUrlMain":"https://doi.org/10.1080/15309576.2023.2204073","RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"PUBLIC ADMINISTRATION","Score":null,"Total":0}
引用次数: 1
Abstract
Abstract This study explores how contracting out can contribute to the fiscal sustainability of public services. Together with the economic advantage that contracting out can lower production costs over government production in house, contracting theory informs that contracting out can offer an insulation of efficient and effective service production from the political incentive problem of the principal. Hypotheses from the perspective are tested over panel data on subnational public service facilities operated via user fees in South Korea. As hypothesized, the analysis results confirm a positive relationship of contracting out with net revenue over government production. While both regionally/municipally owned corporations (R/MOCs) and nonprofits demonstrate their capabilities as competent partners of a government, nonprofits are more effective at the generation of net revenue. The study discusses the implications of contracting out for publicness and a style of governance that actively utilizes the flexibility and expertise of organizations outside a government.
期刊介绍:
Public Performance & Management Review (PPMR) is a leading peer-reviewed academic journal that addresses a broad array of influential factors on the performance of public and nonprofit organizations. Its objectives are to: Advance theories on public governance, public management, and public performance; Facilitate the development of innovative techniques and to encourage a wider application of those already established; Stimulate research and critical thinking about the relationship between public and private management theories; Present integrated analyses of theories, concepts, strategies, and techniques dealing with performance, measurement, and related questions of organizational efficacy; and Provide a forum for practitioner-academic exchange. Continuing themes include, but are not limited to: managing for results, measuring and evaluating performance, designing accountability systems, improving budget strategies, managing human resources, building partnerships, facilitating citizen participation, applying new technologies, and improving public sector services and outcomes. Published since 1975, Public Performance & Management Review is a highly respected journal, receiving international ranking. Scholars and practitioners recognize it as a leading journal in the field of public administration.