Efficiencies of and Motivations for Contracting Out in the Public Sector

The Case of Social Services in Spain

Bibliographic Data

ID6446540
AuthorsDanny Chow (0000-0001-8410-0663, School of Business Maynooth University Maynooth Ireland), Juan Carlos Garrido‐rodríguez (0000-0002-9415-7097, Department of Accounting and Finance University of Granada Granada Spain), José Luis Zafra Gómez (0000-0001-7191-6591, Department of Accounting and Finance University of Granada Granada Spain)
Year2024
Volume103
Issue3
Pages693-706
Publication date2024-11-28
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenuePublic Administration (JOURNAL)
Journal identifiersISSN: 0033-3298 • E-ISSN: 1467-9299
PublisherWiley (PUBLISHER • GB)
DOI10.1111/padm.13047
OpenAlexW4404868069
LanguageEN
Citations received2
References cited75

Debates on contracting out to the private sector is primarily focused on the cost efficiency of its provision, drawing on experiences with hard or technical services such as waste and water management. This paper focuses on a growing interest in the role and impact of sourcing decisions in softer or more human‐centered services, such as social services, where sourcing decisions are more complex or multifaceted. Using actual cost data obtained from open access government sources on social services in Spain, the first objective was to compare the cost efficiencies of different sourcing decisions using estimations of Technology Gap Ratios of different municipalities through Order‐M Panel Data. The second objective analyzed motivations for contracting out through a survey of municipal managers in Andalusia using principal components analysis combined with multinominal logit regressions. Our findings suggest that while contracting out to the private sector is, relatively speaking, the most cost efficient, most municipalities have decided to keep service provision in‐house. Decisions to contract out social services are not based only on cost but also incorporate a range of other considerations such as the municipalities' population size, its stakeholder expectations, and other complexities associated with service provision

Business · Economic growth · Economics · Economy · Political science · Public economics · Public sector · Social sector · Occupational Health and Safety Research · Public Administration · Public Policy and Administration Research · Regulation and Compliance Studies