Despite widespread implementation across the industrialised world,
public sector outsourcing remains a contentious policy for the
simple reason that many outsourcing contracts fail. Critics of
outsourcing often argue that the stated efficiency gains are
illusory if outsourcing leads to a reduction in the quality of
service provision or a reduction in workers' terms and conditions
of employment. In this book, we ask: Do the criticisms of
outsourcing have any empirical validity? How can we explain the
observed heterogeneity in outsourcing outcomes? In answering these
questions, we focus on the role of uncertainty, incentives and
transaction costs on contractual relationships. Although the
importance of these factors is well-known, there is little
empirical work analysing the effect of these factors on
public-sector outsourcing arrangements. The results, therefore,
should help business, students and government policymakers in
identifying factors that affect the efficiency of outsourcing
arrangements.
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