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.