Municipal Service Provision Choices within a Metropolitan Area

Abstract

The authors investigate the decision of municipal governments to out source the provision of public services during the 1980s and 1990s—a period of increased responsibility for municipalities. This study extends previous empirical work on outsourcing by distinguishing the type of outsourcing used (e.g., public, private, or other types of providers) and treating the out sourcing decision as a dynamic choice. Institutional characteristics and fiscal stress are found to play an important role in explaining service choices. Multinomial logistic regressions indicate that outsourcing was more common for poor cities than for wealthier ones, with the former often relying on government agencies and the latter opting for privatization. Throughout time, these choices are likely to reinforce interjurisdictional patterns of disparity in service quality and costs.