Monitoring costs in local service provision. Comparing contract forms in Poland

ABSTRACT

This paper adopts a transaction costs (TCs) approach towards analysing the transactions of local governments in the service sector. The objective of the paper is to expand the analysis of the TCs concept by going beyond the conventional service-type-driven models. This study examines the cost of monitoring (MC) service contracts in Poland as perceived by local government officials, focusing on different forms of externalisation. The research involves utilising quantitative methods to examine how five distinct governance structures influence perceptions of TCs. The study suggests that the entity type, whether a public or private agent, affects the perceptions of monitoring costs in contractual agreements. The research found that the monitoring costs associated with public sector contracts are perceived to be higher than in public-private transactions, challenging previous findings. Further research on Inter-Municipal Cooperation should focus on the final product quality monitoring area, representing the most costly aspect of multi-principal structures.

KEYWORDS:

• Delivery choices
• externalisation
• re-municipalisation
• transaction costs
• quantitative
• services

Acknowledgments

The article is part of a research project supported by the Polish National Science Centre, entitled “Determinants of local public service provision model in the context of transaction costs economy, market characteristics and political costs” under grant agreement number UMO-2016/23/B/HS4/03148.

I would like to express my gratitude to those who were in the project team and supported me all the way when this paper was written: Julita Łukomska, António F. Tavares and Justyna Ślawska. I am giving special thanks to Justyna, who helped with the final choice of analysing tool and specification of the models for this paper.

I also thank all reviewers who helped me anonymously to improve the paper and those who discussed it with me during the European Urban Research Association and European Consortium for Political Research annual conferences.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by the Narodowe Centrum Nauki [UMO-2016/23/B/HS4/03148].