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Assessing the Effects of User Accountability in Contracting Out

Esteve, Marc; Garrido-Rodríguez, Juan Carlos; Moore, Alice; Schuster, Johannes; Gómez, José Luis Zafra; (2023) Assessing the Effects of User Accountability in Contracting Out. Journal of Public Administration Research and Theory , Article muad020. 10.1093/jopart/muad020. (In press). Green open access

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Abstract

How does contracting out affect service performance? Evidence to date is mixed. We argue that this is partially due to prior studies focusing often on whether—not how—services are contracted. Yet, how services are contracted matters. In particular, we argue that whether users pay user fees for services to contractors affects efficiency. Where they do, contractor revenue depends on user satisfaction and contractors face incentives to provide quality services to users to retain revenue. Where, by contrast, governments fund services, information asymmetry about the quality of services users receive allows contractors to shirk quality. The assertion is substantiated by empirical evidence derived from a comprehensive analysis of conditional efficiency within the water supply services across 2,111 municipalities in Spain, employing a two-stage conditional order-m data panel estimation. Our results show that contracting out where users pay service fees and thus have incentives to hold contractors accountable outperforms contracting out without user fees in quality-adjusted service provision.

Type: Article
Title: Assessing the Effects of User Accountability in Contracting Out
Open access status: An open access version is available from UCL Discovery
DOI: 10.1093/jopart/muad020
Publisher version: https://doi.org/10.1093/jopart/muad020
Language: English
Additional information: © The Author(s) 2023. Published by Oxford University Press on behalf of the Public Management Research Association. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/), which permits unrestricted reuse, distribution, and reproduction in any medium, provided the original work is properly cited.
UCL classification: UCL
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Political Science
URI: https://discovery.ucl.ac.uk/id/eprint/10176716
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