Cost and Efficiency in Government Outsourcing: Evidence from the Dredging Industry

• 成果类型: Article
• 署名作者: Barkley, Aaron
• 署名单位: University of Melbourne
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.20190018
• 发表日期: 2021
• 页码: 514-547
• 关键词: 1st-price auctions; COMPETITION; PRIVATE; BOUNDARIES; ECONOMICS; entry; MODEL

摘要

This paper investigates the how government outsourcing affects efficiency and expenditures by considering how outsourcing decisions are determined along two dimensions: (i) cost differences between private firms and government suppliers of public goods and (ii) dynamics arising from cost complementarities and capacity constraints. I formulate and estimate a dynamic model of government outsourcing using project-level data from the dredging industry. Model estimates indicate substantial cost savings due to outsourcing but also that government presence in the market yields cost reduction. A counterfactual policy featuring direct competition between government and private sector firms finds a total expenditure reduction of 15.7 percent.