Untangling the Complexity of the Association between Contracting and Local Fiscal Performance and Income Inequality in Terms of Competing Values

Abstract

Public contracting is designed to reduce costs and to enhance service quality. However, few prior studies have clarified the multiple performance dimensions of public service delivery influenced by contracting. This study empirically tests how different contracting elements are associated with local fiscal performance and income inequality in terms of competing values. For the test, the different contracting elements (scope, competition, stability, specification and monitoring) are respectively measured through a nationwide public service delivery survey. Multiple performance values of public service delivery (efficiency, effectiveness and equity) are measured through local fiscal data and the Gini index. Overall, competitive market is associated only with efficiency, while stability is related only to equity.