Capturing the benefits of competition is a key argument for outsourcing public services, yet public service markets often lack sufficient competition. The authors use survey and interview data from U.S. local governments to explore the responses of public managers to noncompetitive markets. This research indicates that competition is weak in most local government markets (fewer than two alternative providers on average across 67 services measured), and that the relationship between competition and contracting choice varies by service type. Public managers respond to suboptimal market competition by intervening with strategies designed to create, sustain, and enhance provider markets. In monopoly service markets, managers are more likely to use intergovernmental contracting, while for‐profit contracting is more common in more competitive service markets. The strategies that public managers employ to build and sustain competition for contracts often require tangible investments of administrative resources that add to the transaction costs of contracting in noncompetitive markets.

Governments continue to increase their reliance on private and nonprofit agents to deliver goods and services to citizens. Yet there is a dearth of scholarly research on the critical decisions made by public managers throughout the contract implementation process-decisions that can have a profound impact on the quality of services delivered to citizens and on the accountability of contractors to the public interest. This research addresses the accountability dynamics in local government contracting by analyzing the decisions public managers make to determine whether they sanction contractors for unsatisfactory performance. This study reports the results of a national survey of local government managers and is supplemented with pre-and postsurvey interview data. Although public managers have powerful tools available, especially in the form of sanctions, the results presented here indicate that several factors prohibit their execution-specifically the burdensome nature of the sanctioning process, willingness to use discretion, and the extent to which the organization is dependent on the poor-performing contractor. Understanding how and why managers use contract sanctions can elucidate both administrative decision making in the implementation process, and as importantly, the influence of this action on public accountability.

Th e authors use a survey experiment to examine how structural diff erences in governance arrangements aff ect citizens' notions of who is culpable for poor service quality. More specifi cally, two questions are investigated: (1) When things go wrong, do citizens attribute more blame to political actors if the provider of government services is a public agency or a private contractor? (2) Does the length of the accountability chain linking political actors to service providers infl uence citizens' attributions of blame? Th e authors hypothesize that provider sector and accountability chain length aff ect citizens' perceptions of political actors' control over service delivery, which, in turn, inform citizens' attributions of blame. Mixed support is found for this theory. Practitioner Points• Citizens view local political actors as having more control over public service delivery when services are provided directly by a public organization (versus a private organization). • Political actors cannot avoid blame for poor service quality by using private organizations to deliver services.• Th e contracting out of local public services to private sector providers does not appear to seriously undermine political accountability.We then draw on theories of blame attribution to develop hypotheses concerning how service provider sector and accountability chain length aff ect individuals' perceptions of political control and, in turn, the amount of blame that individuals ascribe to political actors for poor service delivery. Next, we describe our research design and data. After presenting our results, we close the article with a discussion of our fi ndings' implications for accountability in the context of third-party governance.

In this study, we argue that contract design is a predominant strategy to set contractual expectations among supply chain partners to manage risk. We draw upon resource dependence theory and transaction cost economics to suggest that variation in risk management strategies is dependent upon both the complexity of the procured product or service and the extent to which it is mission critical. In this preliminary study of publicsector supply chains, we find evidence based on an analysis of over 240,000 buyer-supplier contracts that when both mission criticality and service complexity are low, suppliers tend to bear most of the disruption risk by agreeing to fixed-price contracts. When mission criticality is high, we find that the federal government is more likely to share risk with suppliers by utilizing incentive contracts. Evidence suggests that cost-reimbursement and incentive contracts are preferred when service complexity is high.

Contract incentives are designed to motivate contractor performance and to provide public managers with a powerful tool to achieve contract accountability. Our knowledge of contract incentives is rooted in contract design, yet as we move beyond contract specification and further into the contract lifecycle, we know little about why and how managers implement incentives. This study assesses public managers’ use of contract incentives in practice and advances theory development. A typology of contract incentives is constructed to capture a comprehensive range of formal and informal incentives, and the factors that influence managerial use of incentives are identified. The findings shed light on the complexities of maintaining accountability in third‐party governance structures and the management techniques aimed at improving the performance of public agencies.