Nonprofits as Local Government Service Contractors

Abstract

Despite the growing role that contracts with nonprofits play in local service delivery, only limited attention has been directed to why some cities rely more on nonprofit organizations to produce services or how political institutions influence the role nonprofits play in service delivery. To investigate these issues, the authors present a transaction cost explanation that focuses on how political system characteristics and structures of service markets shape the costs of negotiating, monitoring, and enforcing contracts for local governments. The findings indicate that forms of government, mayoral turnover, racial segregation, and the market of nonprofit producers influence the role of nonprofits in delivering elder services, but decisions to contract exclusively with nonprofits are subject to different influences than decisions to jointly produce service with a nonprofit organization.

Municipal Service Delivery: The Role of Transaction Costs in the Choice between Alternative Governance Mechanisms

“…Prior research highlights the role of service type, the level of political and administrative turnover, and the socioeconomic and demographic status of the jurisdiction as relevant factors influencing the decision (Stein 1993;Clingermayer, Feiock & Stream 2003;Feiock, Clingermayer, & Dasse 2003;Joassart-Marcelli & Musso 2005;Brown, Potoski, & Van Slyke 2006;Carr, LeRoux & Shrestha 2009;Feiock and Jang 2009;Shrestha & Feiock 2010). The significant amount of research in the US context contrasts sharply with the limited scope of analysis in Europe, where most research focuses in dyadic choices -e.g.…”

Making a Market out of a Welfare State: Swedish Local Politicians’ Perspectives on Elderly Care Marketisation

“…Regarding non-profit provider preferences, my analysis also confirms the importance of political factors, as has been shown by other studies (Feiock and Jang 2009;Warner and Hefetz 2012). In the Swedish context, the very nature of the public funding system might compel local politicians, as gatekeepers of the welfare system, to be stricter about market entry conditions for providers.…”

“…These arguments used by proponents of initiating the marketisation process present the view that market competition would lead to reduced costs and improved quality, in addition to increased freedom of choice for care users (SOU 2016, 306). This logic is also present in local outsourcing with non-profit organisations, which are characterised by their service accountability, professionalism, and community legitimacy, for instance (Feiock and Jang 2009 Politicians are also in favour of more alternatives to public service production due to the inability to meet all of these care demands. Nevertheless, Stolt also mentioned the possibility that the elderly may reflect a political standpoint in opposition to private alternatives to which they are not accustomed.…”

“…This logic is also present in local outsourcing with non-profit organisations, which are characterised by their service accountability, professionalism, and community legitimacy, for instance (Feiock and Jang 2009). In their seminal contribution, Glaeser, and Shleifer (2001) argued that non-profit 97 Arwidsson and Weserberg (2012) also showed that for-profit companies might lag in terms of personnel density and education level.…”

Outsourcing and strategy in Spanish town halls: a field study

“…Case Studies in the USA (non-specified number) Feiock and Jang (2009) To study the involvement of non-profit organisations in local services addressed to seniors Survey. Secondary information from a database.…”