Production Costs, Transaction Costs, and Local Government Contractor Choice

Abstract

"This paper explores the determinants of the sector choice decision by contracting local governments. In the next section, we examine the production costs and transaction costs associated with organizations from the three sector. Then, we develop a general model of the contractor choice decision and empirically test it using data on local government contract arrangements for three health services: hospital, alcohol/drug prevention and treatment, and mental health."

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Keywords

service delivery, state and local governance, contracts

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