Outsourcing

Since the late 1970s, the world has experienced a wave of microeconomic reform that has resulted in the privatisation of many previously State-owned assets, as well as other reforms directed at improving the efficiency of government business enterprises. This project focuses on one important instrument of reform: outsourcing of public-sector service provision. Despite the prevalence of outsourcing, there has been relatively little empirical work analysing the effects of outsourcing at the contract level.

This project also seeks to explore new developments in understanding the effeiciency of contractual relationships. For instance, economic theory has traditionally posited that behaviour is governed by extrinsic factors: monetary rewards and the like. Recent advances in contract theory, however, have argued that intrinsic motivation may also play an important role and that offering extrinsic rewards may often undermine intrinsic motivation.

Completed papers from this project include:

• Paul H. Jensen and Robin E. Stonecash, The Efficiency of Public Sector Outsourcing Contracts: A Literature Review,PDF format (183K)
• Paul H. Jensen and Robin E. Stonecash, Contract Efficiency in the Presence of Demand and Cost Uncertainty, PDF format (469K)

For further information please contact Professor Paul Jensen on [email protected] .

Industrial Economics team members