Reforming Service Delivery in China: The Emergence of a Social Innovation Model

In this paper, I find that the political economy of public goods provision by the local government in Shanghai influenced the decision to transition from the existing public service delivery model based on residency, to a social innovation model where the government contracts with non-profits and private firms to provide services at lower costs and experiment with different levels of provision (购买服务). Contracting also forms a bridge between old governance models and new ones, which potentially allow for a process of administrative modernization without social instability. Contracting for public-goods provision is increasing in prevalence not only in Shanghai but also in many other provinces, and is professionalizing participating organizations and providing public goods to vulnerable populations. While this practice is not yet increasing non-profit participation in the policy process, the creation of access channels that are currently operating solely in one direction may at some future date allow groups to participate in relevant policy areas. Contracting public goods might have the potential of significant effects beyond the term of the contract by increasing pluralism in local public policy and generating more demand for transparency and accountability of government services. As such, this is an interesting bellwether for future political change in China.