Engaging Citizens in Government Contracting: A Theoretical Approach for the Role of Social Service Nonprofits

Abstract

Outsourcing may lead public administrators to regard service recipients as customers to be satisfied rather than as citizens demanding access and empowerment. This research investigates the extent to which social service nonprofits might bridge the gap between citizenship and customer service to advance shared values and reinforce public institutions. Due to unique institutional and organizational features, such as value-driven commitments, restrictions to financial distribution, and special knowledge of under-represented groups, social service nonprofit contractors may offer distinct advantages over for-profit firms in contract management. We begin by analyzing the conflicting and complementary aspects of citizenship and customer service in democracy and identify the advantages of nonprofit contractors. Then, using the lenses of transaction cost economics and agency theory, we explore how nonprofits can mitigate contract risks while bolstering citizenship. We present several suggestions to guide public agencies and future scholarship on reasserting the importance of public values in modern governance.

Interpreting performance information: Motivated reasoning or unbiased comprehension? A replication and extension

“…Further advancing knowledge on whether and when sector preferences distort the ability of citizens to choose between different providers is highly relevant to public service markets in which public, non‐profit, and for‐profit providers frequently compete to deliver a broad range of technical and social services (Anguelov & Brunjes, 2023; Park & Brunjes, 2022; Petersen et al, 2015). As first shown by Baekgaard and Serritzlew (2016), prior preferences for the public sector make Danish citizens systematically evaluate identical performance information about public and private service providers in the healthcare and education contexts to favor the former.…”

“…In contrast, nonprofit providers are driven less by the incentive to extract profit and thus more inclined to signal credibility and aligned interests in producing high‐quality services (Arrow, 1963; Park & Brunjes, 2022). With restrictions to financial redistribution and stronger value‐driven commitments to the public interest, nonprofit providers are often perceived as less likely to respond opportunistically, such as by reducing service quality (Glaeser & Shleifer, 2001; Hart et al, 1997).…”

“…Distinguishing between for‐profit, nonprofit, and public providers renders a more realistic examination of prior sector preferences, as all three types of providers operate in public service markets in many countries. Incorporating both nonprofit and for‐profit private service providers is important to avoid conflating key differences in the profit motives and value‐driven commitments of private providers (Park & Brunjes, 2022).…”

Partners or Providers? An Analysis of Nonprofit Federal Contractor Performance

“…At the same time, the nonprofit sector is increasingly competitive, meaning nonprofits may experience similar substitution pressures as traditional firms, further motivating high levels of performance (Brunjes, 2020; Eikenberry & Kluver, 2004; Sandberg et al, 2020). Nonprofits offer a chance for government agencies to access important but disadvantaged communities (Park & Brunjes, 2022), the chance to spend less on oversight (Van Slyke, 2007), and reliability associated with shared goals (Witesman & Fernandez, 2013). This means that NPOs should be more reliable, require less oversight, and perform better than other contractors, especially in areas where public values are essential and markets are competitive.…”

A replication of “Contracting out: For What? With Whom?”

“…In their 1986 study of local government contracting, Ferris and Graddy were some of the first scholars to refine the idea of the make or buy decision , describing both a production choice where government officials must balance “demand for contracting out and the available supply of external producers” (p. 332) and a sector choice, where contract managers pick between for profit firms, nonprofit organizations, and other governments as potential contractors. As a result, their analysis includes an initial consideration of many ideas that have been central to the study of contracting out in public administration, including market competition and efficiency (Brunjes, 2020; Johnston & Girth, 2012), cost savings (Bel et al, 2018; Savas, 2002), loss of control (Box, 1999; Moe, 1987; Rosenbloom & Piotrowski, 2005), service quality (O'Toole & Meier, 2004), relational contracting and the importance of shared goals (Anguelov, 2020; Bertelli & Smith, 2010; Witesman & Fernandez, 2013), oversight and ease of measurement (Brown et al, 2006; Brown & Potoski, 2003), task complexity (Kim et al, 2016), and community‐building (Lecy & Van Slyke, 2013; Park & Brunjes, 2022; Van Slyke, 2007). Consequently, Ferris and Graddy's (1986) descriptive analysis introduced public administration scholars to many of the theoretical and empirical underpinnings for decades of related research.…”