The limitations of government by contract

Abstract

Government by contract is replacing government by administrative hierarchy in many fields. There have been some benefits in terms of tighter management and clearer definition of responsibilities but the approach has limitations. This article argues against the view that contracts are the most appropriate means of organizational control in the public sector. Separation of client and contractor can deny public responsibility; contracting out can reduce public accountability to bargaining; and the complex process of governing, involving learning and adapting, cannot be reduced to contracting.