Contracts as Reinvented Institutions in the Public Sector: A Cross-Cultural Comparison

Contracts as Reinvented Institutions in the Public Sector: A Cross-Cultural Comparison

Contracts as Reinvented Institutions in the Public Sector: A Cross-Cultural Comparison

Contracts as Reinvented Institutions in the Public Sector: A Cross-Cultural Comparison

Synopsis

Contracting has become one of the tools that governments use to make their services more efficient and effective. This work studies the positives and negatives involved with the multiple elements of contracting. Contract culture is broken down into its many parts: rules and regulations, norms and values, local governments and the private sector. This allows the authors to examine the topic through a unique cross-cultural lens and provide a fresh take on this expanding topic. Sources such as survey data, in-depth case studies, and analysis of advocacy coalitions are used to shed new light on contract governance. Topics include: •Contracting on the Public Agenda. •Limits of the "New Contractualism." •The "hard" and "soft" elements of contracts. •Local Governments. •Contracting as part of the New Public Management.

Excerpt

Contracting can be understood as “the design and implementation of contractual relations between purchasers and suppliers” (Domberger 1998, 12). A contract can be defined as “an agreement between two or more persons intended to create a legal obligation between them and to be legally enforceable” (Drewry 2000, 257). “Contracting out will be used to refer to a situation where publicly funded services are purchased from private organizations” (Boston 1995, 82). “To hire an external organization to provide goods or services rather than provide it in-house” (Domberger 1998, 210). “Privatization is the transfer of assets and/or service functions from public to private hands. It includes therefore activities that range from selling State Owned Enterprises to contracting out public services with private contractors” (Hodge 2000, 14, quoting from Leiberman 1993).

In recent years contracting has been used both within the limits of the public sector and between a public purchaser and a private provider. When a public purchaser buys a product or a service from a private provider, the matter is referred to as “contracting out.” In recent years, public sector organizations have also taken up contracts as governing and management tools to boost their own performances. When a public body “buys” a product or a service in-house from a public body provider, we refer to the matter as “performance contracting” (also known in some places as “internal contracting,” as opposed to “external contracting”). A performance contract within the borders of the public sector will typically not create any legal obligation.

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