Understanding the Dynamic Effect of Contracting Out on the Delivery of Local Public Services

Abstract

Máñez J., Pérez-López G., Prior D. and Zafra-Gómez J. L. Understanding the dynamic effect of contracting out on the delivery of local public services, Regional Studies. Contracting out is a mechanism through which the delivery of public services can be made more efficient. However, the process has yielded conflicting results. This paper presents a dynamic, mixed approach, incorporating an intertemporal frontier and a matching technique, to measure the short- and long-term effects of the implementation of contracting out on the efficiency of local public service delivery. The study demonstrates the existence of temporary inefficiency arising from the change in service management when contracting out takes place, followed by an increase in efficiency among municipalities that contract out, with respect to comparable municipalities that do not do so.

Máñez J., Pérez-López G., Prior D. and Zafra-Gómez J. L. 对外发包真能促进成本效率？一个解释地方公共服务供给对外发包效应的短期与长期动态方法，区域研究。对外发包，是使公共服务提供能够更有效率的机制。但该过程却产生了矛盾的结果。本文呈现一个动态的混合方法，纳入跨时边界与配对技巧，以衡量实施对外发包后，对地方公共服务提供效率的短期及长期效应。本研究证实，当实施对外发包时，服务管理的改变产生了暂时性的非效率，但相对于不对外发包的市政单位而言，对外发包的市政单位的效率随后将增加。

Máñez J., Pérez-López G., Prior D. and Zafra-Gómez J. L. Comprendre l'impact de la sous-traitance sur la prestation de services publics locaux, Regional Studies. La sous-traitance est un mécanisme par lequel la prestation de services publics peut être rendue plus efficace. Cependant, le processus a produit des résultats contradictoires. Cet article présente une approche mixte dynamique qui englobe une frontière inter-temporelle et une technique d'appariement afin de calculer les effets à court et à long terme de la mise en oeuvre de la sous-traitance sur l'efficacité de la prestation de services publics locaux. L’étude démontre la présence de l'inefficacité temporaire qui résulte d'un changement de la gestion des services au moment de la décision de sous-traiter, suivi d'une augmentation de l'efficacité parmi les municipalités qui sous-traitent, par rapport aux municipalités comparables qui ne le font pas.

Máñez J., Pérez-López G., Prior D. and Zafra-Gómez J. L. Untersuchung der Auswirkungen einer externen Auftragsvergabe auf die Umsetzung von kommunalen öffentlichen Dienstleistungen, Regional Studies. Die externe Auftragsvergabe ist ein Mechanismus, der eine effizientere Erbringung von öffentlichen Dienstleistungen ermöglicht. Allerdings hat dieses Verfahren zu widersprüchlichen Ergebnissen geführt. In diesem Beitrag werden mithilfe eines dynamischen gemischten Ansatzes unter Verwendung einer intertemporalen Frontier- und einer Zuordnungstechnik die kurz- und langfristigen Auswirkungen einer externen Auftragsvergabe auf die Effizienz von kommunalen öffentlichen Dienstleistungen gemessen. In der Studie wird die Existenz einer vorübergehenden Ineffizienz durch die Veränderungen bei der Verwaltung der Dienstleistungen nach der externen Auftragsvergabe nachgewiesen, gefolgt von einer Effizienzsteigerung in Gemeinden mit externer Auftragsvergabe gegenüber vergleichbaren Gemeinden ohne eine solche.

Máñez J., Pérez-López G., Prior D. and Zafra-Gómez J. L. Análisis del efecto de la contratación externa en la prestación de servicios públicos locales, Regional Studies. A través de la externalización de servicios el sector público pretende obtener mayores niveles de eficiencia. Sin embargo, los estudios realizados hasta la fecha han arrojado resultados contradictorios. Este artículo presenta un enfoque dinámico y mixto, que incorpora una frontera intertemporal junto con el uso de la metodología de correspondencia, para medir los efectos a corto y largo plazo de la implementación de la contratación externa sobre la eficiencia de la prestación de servicios públicos locales. El estudio demuestra la existencia de una ineficiencia temporal derivada del cambio en la gestión del servicio cuando la contratación tiene lugar, seguido por un aumento en la eficiencia entre los municipios que externalizan el servicio, con respecto a los municipios que son comparables entre sí, pero que no llevan a cabo procesos de externalización.

• Contracting out
• Local government
• Efficiency

• 对外发包
• 地方政府
• 效率

• Sous-traitance
• Administration locale
• Efficacité

• Externe Auftragsvergabe
• Kommunalbehörden
• Effizienz

• Contratación externa
• Gobierno local
• Eficiencia

JEL classifications:

• D61
• H42
• H72
• L33

Notes

1. is the average cost-efficiency growth that new contractors would have experienced if they had not started to contract out.

2. Where F is the distribution function; β is a k-dimensional vector of unknown parameters; and u_i is an error term with zero expectation, .

3. The initial database was composed of 771 Spanish municipalities for the period 2002–10. However, in order to apply matching techniques, the sample had to be filtered, as the starting point must contain only local governments that have not contracted out the refuse collection service. Accordingly, the local governments that in the initial period (year 2002) had already contracted out their refuse collection service were excluded.

4. In view of the small size of the new contractors’ cohorts between 2003 and 2010 (Table 1), a year-by-year stochastic dominance test was not necessary.

5. As the length of time considered increases, the number of new contractors considered, per unit of time, decreases.

6. If a municipality did so in 2010, there would only have information for to t, but if it had done so in 2003, there would have information for the whole period to .

7. Matching was performed using the Stata psmatch2 command (Leuven and Sianesi, 2003/06), but in order to overcome the limitations inherent in the calculation of p-values corresponding to the EEG of new contractors by bootstrapping techniques, the p-values were calculated using subsampling with 2000 replications (Politis et al., 1999) and the Stata nnmatch command (Abadie et al., 2004).

8. In Spain there is no minimum duration for the management of the waste collection service. Nevertheless, contracts are usually for at least one year, and are normally renewable. Those analysed in this study are all long-term. Spanish law on procurement lays down certain minimum requirements and principles to be followed to promote the freedom of options in determining contract terms for the provision of public services. It also enables contract terms to be reviewed when this is stipulated in contracts for the management of public services, and for prices to be reviewed after two years.