Local institutions and public service outsourcing: Managerial professionalism, mayoral strength, and electoral rules

Abstract

This research examines how institutional contexts matter for US municipalities' service outsourcing decisions, deriving data from the ICMA's multiple rounds of surveys concerning local institutions and service delivery choices. We focus on seven pivotal local institutions that address managerial professionalism, mayoral strength, and electoral rules. Moreover, a composite index measuring the general nature of the municipal structure on a political-administrative scale is constructed based on the local institutions examined. The empirical estimations use the existence of initiatives and popular referenda allowing citizen voters to adjust local statutes as instrumental variables for local institutions. We find that municipalities with a council-manager municipal form, a professional manager, a weak mayor, and nonpartisan and at-large elections of council members outsource less services. Professional managers can moderate the effects of contextual factors on government outsourcing decisions. Moreover, municipalities with a more political or a less administrative municipal structure outsource a larger portion of services. Evidence for Practice• The statutory council-manager municipal form, the existence of a professional manager, a weak mayor, and nonpartisan and at-large elections of council members have negative effects on the degree of government service outsourcing. • Professional managers within municipalities can moderate the influence of key contextual factors, such as population size and fiscal stress, on local outsourcing decisions. • A municipal structure that is more political or less administrative in nature positively affects government service outsourcing, especially outsourcing through interlocal cooperation. • The driving factors are distinct across different forms of public service outsourcing, including outsourcing to private firms, nonprofit organizations, and other governments.

Service Outsourcing and Government Fiscal Conditions: Do Market Competition, Bureaucrat Support, and Management Capacity Matter?

“…4 This research focuses on government service outsourcing, including the last three forms of contracting practices. Despite concerns about their accuracy and reliability (Lamothe et al, 2018), the data from the ICMA's ASD surveys constitute “possibly the strongest large sample study of governments’ service production practices” (Brown & Potoski, 2003a, p. 449) and have been widely used in previous studies (e.g., Brown & Potoski, 2003a, 2003b; Feiock & Jang, 2009; Fernandez et al, 2007; Fernandez et al, 2008; Girth et al, 2012; Hefetz & Warner, 2004, p. 2012; Hefetz et al, 2012; Lamothe & Lamothe, 2016; Wei et al, 2022). The ASD surveys in 1997, 2002–2003, 2007, and 2012 received responses from 1,586, 1,283, 1,599, and 2,184 municipalities or counties, representing response rates of 32%, 23.9%, 26.2%, and 21%, respectively.…”

“…1 As a result, municipalities located in nonmetropolitan areas cannot fully benefit from service outsourcing. As the number of competent private service deliverers engaged in outsourcing bidding increases, local governments become more likely to exploit the fierce competition between them, which usually results in lowering quoted prices and declining monitoring costs (Wei et al, 2022).…”

“…1 As a result, municipalities located in nonmetropolitan areas cannot fully benefit from service outsourcing. As the number of competent private service deliverers engaged in outsourcing bidding increases, local governments become more likely to exploit the fierce competition between them, which usually results in lowering quoted prices and declining monitoring costs (Wei et al, 2022). Hypothesis 3a (market competition hypothesis): The metropolitan status of municipalities and the supply of competent private service deliverers positively moderate the effect of service outsourcing on government fiscal conditions. Previous studies have shown that service outsourcing negatively affects public employees’ working conditions, salaries, and other benefits (e.g., Fernandez et al, 2007; Vrangbæk et al, 2015; Yang & Kassekert, 2010).…”

Epistemic decolonization of public policy pedagogy and scholarship

“…The answer to this question rests on the implicit or explicit assumptions the disciplinary sources bring to bear on the relationship between policy and administration. Although early public administration scholarship subscribed to the policy‐administration dichotomy and valorized ideals like neutral competence, public administration scholarship has for a long time made a persuasive case for the inter‐relatedness of policy/politics and administration (Gaus, 1950; Long, 1949; Svara, 1998; Wei et al, 2022; Yu & Jennings Jr, 2021). A clear implication of this position is that an understanding of policy, sans administration, is erroneous and invalid.…”

“…Wei et al (2022) look to managerial professionalism, among other factors, to explain the decision to outsource public services. They find that municipalities with a council‐manager form of government, a professional manager, a weak mayor, and nonpartisan and at‐large elections of council members outsource fewer services.…”