Academic journal article Public Administration Quarterly

How Political Are Government Contracting Decisions? an Examination of Human Service Contracting Determinants

Academic journal article Public Administration Quarterly

How Political Are Government Contracting Decisions? an Examination of Human Service Contracting Determinants

Article excerpt


The massive use of government contracting to provide public goods and services and achieve policy priorities has become a common and desirable government practice at all levels of governments. This governance mode has fundamentally reshaped the features and businesses of the public sectors (Kettl, 1993). Accordingly, "third-party government" (Salamon, 1981), "government by proxy" (Kettl, 1988), "hollow state" (Milward & Provan, 2000), and many other labels have gradually been attached to the public management narrative.

Government contracting itself is a complex process, roughly involving contracting decision-making and contracting management. The prosperity of government contracting, naturally, has aroused a huge number of studies on these two categories of topics (e.g., Cooper, 2003; Donahue, 1989; Kettl, 1993; Savas, 1987; Sclar, 2000). Particularly, the motivations behind government contracting decisions, however, are not well understood. In view of the potential benefits and costs of contracting, what factors motivate or hinder public managers to put contracting onto their agendas?

Current research fails to demonstrate a consistent answer. The main bifurcation lies in the wrestling of pragmatism and politics as the dominating driving forces in make-or-buy decisions. At first, empirical evidences diverge at the local level. Early studies in the 1980s and 1990s showed political factors, like public service constituency group and governance structure, as significant determinants of local government contracting (e.g., Ferris, 1986; Ferris & Graddy, 1986; Morgan, Hirlinger & England, 1988). However, Warner and Hebdon (2001), based on evidence from 201 local governments in New York, concluded government contracting was more pragmatic-oriented by information, monitoring, and service quality. Ironically, Fernandez, Ryu, and Brudney (2008) argued politics, such as political ideology and public employee opposition, still mattered. Even up to the state level, the debate continues. Using a large sample of 1,175 state agencies in fifty American states, Brudney, Fernandez, Ryu, and Wright (2005) showed that American state contracting decisions were immune to political intervention. However, Ni and Bretschneider (2007) and Price and Riccucci (2005) demonstrated that political rationales played a major role in contracting out state E-Government services and prisons, respectively. A possible source for these discrepancies comes from the different types of goods and services these researches examine.

This study continues exploring the driving forces in government contracting decisions, specifically in human services, aiming to add knowledge to contracting motivation literature. Human service contracting is an important and distinct component of government contracting. In human services, the majority of services are provided through publicly funded contracts, mostly with nonprofits. Moreover, human service contracting, not fitting well with the traditional privatization theory, is more like a negotiated and cooperative practice. Given these characteristics, the whole human service contracting process has always been considered as a political practice (Bernstein, 1991; DeHoog, 1984; Johnston & Romzek, 1999; Saidel, 1991). This sheds light on human service contracting research, but very little particularly on contracting decision motivation. However, because of the specificity of human service contracting, any knowledge of contracting may not be complete without human service element.

Thus, the research question of this paper is: Do political factors dominate government human service contracting decisions? Rather than using conceptual or case study methods like much of the current researches, this paper relies on a cross-sectional quantitative analysis. The unit of analysis here is state government, or, more precisely, state human service agency. The paper begins with a brief description of government human service contracting. …

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