Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81502
Authors: 
Andersson, Fredrik
Jordahl, Henrik
Year of Publication: 
2011
Series/Report no.: 
IFN Working Paper 874
Abstract: 
We survey the literature on the effects of public sector outsourcing. Guided by theory, we systematically arrange services according to the type and magnitude of their contractibility problems. Taken as a whole, the empirical literature indicates that public sector outsourcing generally reduces costs without hurting quality. This is clearly the case for “perfectly contractible services” like garbage collection, but outsourcing often seems to work reasonably well also for some services with more difficult contracting problems, e.g. fire protection and prisons. Outsourcing seems to be more problematic for credence goods, with residential youth care as the prime example. In contrast to previous reviews, we conclude that ownership and competition appear to be about equally important for the consequences of public sector outsourcing.
Subjects: 
Outsourcing
Contracts
Tendering
Ownership
Competition
Quality
JEL: 
D23
H11
L33
Document Type: 
Working Paper

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