The impact of transaction costs on the use of mixed service delivery by local governments

Source: Trevor L Brown, Matthew Potoski, David M Van Slyke, Journal of Strategic Contracting and Negotiation, vol. 1 no. 4, December 2015
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From the abstract:
When governments deliver services through mixed delivery arrangements, the sponsoring government and an implementing partner split or share service production, delivery, or management responsibilities. By combining aspects of contract and direct service delivery, mixed service delivery may combine the benefits of contracting with those of direct service delivery. Analyses of 87,009 services delivered by 2174 local governments in the USA shows that over 20% of local government services are delivered through approaches that mix elements of direct and contract production. Local governments choose mixed approaches in response to the transaction cost and market factors that affect their choice of direct and contract approaches. Mixed service delivery may provide the opportunity to harness the upsides of both contract and direct delivery approaches. If conditions are favorable, mixed service delivery allows governments to simultaneously evaluate alternative suppliers while maintaining a degree of their own internal production capacity.