Outsourcing Public Service Delivery: Management Responses in Noncompetitive Markets

Capturing the benefits of competition is a key argument for outsourcing public services, yet public service markets often lack sufficient competition. The authors use survey and interview data from U.S. local governments to explore the responses of public managers to noncompetitive markets. This research indicates that competition is weak in most local government markets (fewer than two alternative providers on average across 67 services measured), and that the relationship between competition and contracting choice varies by service type. Public managers respond to suboptimal market competition by intervening with strategies designed to create, sustain, and enhance provider markets. In monopoly service markets, managers are more likely to use intergovernmental contracting, while for‐profit contracting is more common in more competitive service markets. The strategies that public managers employ to build and sustain competition for contracts often require tangible investments of administrative resources that add to the transaction costs of contracting in noncompetitive markets.     

Public–Private Partnerships: An International Performance Review

Public–private partnerships are enjoying a global resurgence in popularity, but there is still much confusion around notions of partnership, what can be learned from our history with partnerships, and what is new about the partnership forms that are in vogue today. Looking at one particular family of public–private partnerships, the long-term infrastructure contract, this article argues that evaluations thus far point to contradictory results regarding their effectiveness. Despite their continuing popularity with governments, greater care is needed to strengthen future evaluations and conduct such assessments away from the policy cheerleaders.     

Managing Public Service Contracts: Aligning Values, Institutions, and Markets

The contracting of public services has been an integral part of public managers’ work for a long time, and it is here to stay. This essay sums up current research on the topic for busy practitioners and scholars. Where are we today with respect to the problems and pitfalls of contracting out, from balancing equity with efficiency to confronting the frequent problem of imperfect markets?     

Knights and Knaves Return: Public Service Motivation and the Delivery of Public Services

ABSTRACT

There are several models for delivering public services such as health care or education, most of which can be summarised under the headings of trust, mistrust, voice, and choice. Each contains assumptions concerning the motivation of the professionals and others who provide the service concerned: that is, the extent to which they are “knaves,” motivated primarily by self-interest, or “knights,” motivated by altruism and the desire to provide a public service. This article highlights the assumptions concerning motivation implicit in each of the delivery models, illustrating the points made by reference to the author's experience as a senior policy adviser to British Prime Minister Tony Blair and to some evidence on the performance of public services under the different models.     

Public–Private Partnerships in Urban Infrastructures: Reconciling Private Sector Participation and Sustainability

The speed and scale of urbanization provide serious challenges for governments all over the world with regard to the realization, maintenance, and operation of public urban infrastructures. These infrastructures are needed to keep up with living standards and to create conditions for sustainable development. The lack of public funds and the inefficiencies of public service provision have given rise to initiatives to stimulate private parties to invest their resources in public urban infrastructures. However, private sector participation creates a whole range of new challenges. The potential benefits are countered by concerns about the compatibility of the private sector's focus on short-term return on investment with the long-term perspective needed to realize sustainability targets. On the basis of a review of literature on experiences with private sector participation in urban infrastructure projects, this article identifies governance practices that help or hinder the reconciliation of private sector participation in urban infrastructure projects with the objective to increase the sustainability of the urban environment.     

The Challenging Business of Long-Term Public–Private Partnerships: Reflections on Local Experience

Many widely publicized arrangements bearing the popular "public–private partnership" label are complex, long-term contracts between municipalities and private companies. In theory, these innovative contracts offer substantial public benefits, including improved service quality, risk sharing with the private sector, and cost savings. In practice, however, the challenges that long-term contracts pose can undermine their successful implementation at the local level. Drawing on illustrative cases, this article explores some practical impediments to achieving market-driven competition, equitable risk sharing, effective performance guarantees, and appropriate transparency in innovative long-term contracts. It examines the inapplicability of the partnership model to most commercial transactions between government and business, the risks of uncontrollable circumstances, the impact of local resource constraints, and barriers to transparency in long-term contracts. It concludes that local governments embarking on long-term contracts must invest in specialized expertise, effective contract management, and strong governance structures.     

The Market Turn in EU Governance—The Emergence of Public–Private Collaboration

The question asked here is how the horizontal relationship between public and private actors, with the overall aim of delivering public service, is squared with the requirement of democratic accountability according to the traditional model of command and control. Empirical analysis of the European satellite navigation program (Galileo), the European Investment Bank and health, and the European Financial market (the Lamfalussy model) shows that efficiency is at the forefront of the collaborations. Democratic accountability is assumed to take place because there is a formal chain of delegation. However, the private actors are not part of that chain and their accountability is never addressed. The market turn in European Union governance has opened up for private authority and emphasis of output legitimacy. It has not opened up for democratic reforms according to the very authority system of governance. We are dealing with a governance turn and yet it is still government.     

Is Private Delivery of Public Services Really Cheaper? Evidence from Public Road Maintenance in Denmark

It is a general finding that cost savings may be obtainedby involving the private sector in publicservice production. This fact should be ofparticular interest to countries with largepublic sectors, such as the Scandinaviancountries, where private involvement has alarge potential. This paper investigatesthis potential by focusing on the Danishroad sector. 275 municipalities areresponsible for the maintenance ofapproximately 60,000 km of Denmark's70,000 km public roads. The analysisconfirms the international evidence:Involving the private sector also seems tomake it possible for the public sector toobtain large cost savings in theScandinavian countries.     

The Art of Service v The Science of Measurement: Measuring and Managing Service Delivery

Mantras such as 'If you can't measure it you can't manage it' have become standards of management practice. At no point are the logic or assumptions that link measurement to performance questioned. Formal measurement has its place in the broader art of service leadership. But so do the other aspects of assessment, including personal experience of the service, observation, frontline input, customer meetings and a raft of informal monitoring activities. When conducted properly, these other ways of knowing are just as reliable, valid and manageable as any quantitative system. More quantification is not necessarily better. Service leaders must stand back and understand when to use the science of measurement and when to develop the art of management.     

Probing the Strategic Intricacies of Public–Private Partnership: The Patent as a Comparative Reference

This article pursues a detailed understanding of strategic considerations in large-scale partnership negotiations that have implications for public service over the long term. Specifically, this study focuses upon the strategic context of negotiation between governmental entities and private firms as fundamental to partnership viability. Metaphorical comparison between U.S. patent policy (especially as it pertains to cutting-edge biotechnical and digital information issues) and public–private partnership is used to coax out new insight about the latter. The first section sketches an outline of U.S. patent policy as a means of generating analogous questions that can structure discussion of strategy in public–private partnerships. The second section explores the intricacies of public partnership by responding to four questions derived from the patent metaphor. In probing the implications of strategic partnership issues for public managers, the final section defines new capacity-building roles that are consistent with governance as an emerging form of public administration.     

Explaining the Forced Exit of Charles Kennedy: Pushing the Public–Private Boundary

The demise of Charles Kennedy as leader of the Liberal Democrats (1999–2006) has generally been understood as an unfortunate consequence of Kennedy's struggle with alcohol dependency. Others have suggested that Kennedy was removed because he proved a poor party leader. In contrast, this article argues that the alcohol issue was of key importance, yet that this factor overlapped with the wider depletion of Kennedy's leadership credibility. It is also suggested that Kennedy's removal was in part a consequence of the continued erosion of the boundaries between public and private life in British politics.     

Gaming in Targetworld: The Targets Approach to Managing British Public Services

To what extent did the extensive system of managing public services by targets, introduced by Tony Blair’s New Labour government in the United Kingdom in 1998, reproduce the classic gaming responses associated with the Soviet Union and other centralized performance‐setting systems? Combining evidence from documentary sources and interviews with high‐level officials in the Whitehall bureaucracy, the author suggests that the three classic types of target gaming can be identified in this public management regime. However, the central managers of the target regime did not put substantial resources into checking performance data, took reported performance gains at face value, and had no coherent antigaming strategy.     

Managing Collaborative Service Delivery: Comparing China and the United States

Successful adoption of collaborative service delivery requires that governments develop better capacity to handle potential pitfalls. In this essay, Yijia Jing of Fudan University and E. S. Savas of the City University of New York provide a framework that compares and contrasts the management practices in China and America. Both nations favor collaborative service delivery and engage in it extensively. Can China's state-affiliated strategy and the United States' competition-oriented strategy both work effectively? Such distinct systems, embedded in vastly different socioeconomic and political institutional environments decisively influence the effectiveness of collaborative service delivery management in the two countries.     

Shared Services: Lessons from the Public and Private Sectors for the Nonprofit Sector

Shared services arrangements in the Australian third sector are becoming more common. Notably, however, there is a lack of information to guide nonprofit organisations through the development and engagement of shared structures. This article reviews the lessons that have been recorded from the public and private sectors with respect to the engagement of shared services arrangements. Additionally this article explores the different types of shared services structures that can be adopted. Overall, this article highlights the need for further research and analysis of issues relating to shared services arrangements in order to assist the increasing number of Australian nonprofit organisations engaging these collective arrangements and structures.