Contracting Out and Social Services: Responses to the Austerity Machine, Financial Condition and Political Parties

Abstract

The aim of this study was to conduct an analysis of the elements of public finances that favor the contracting out of social services, together with political and socioeconomic issues. The results obtained reflect the existence of significant differences in this respect according to the size of the municipal population, and show that while most indicators of a worsening financial condition, together with the neighborhood effect and a conservative political ideology, increase the likelihood of contracting out taking place, the “Austerity Machine” is not, in fact, associated with a greater probability of social care being contracted out in larger municipalities.

Political Ideology and Social Services Contracting: Evidence from a Regression Discontinuity Design

“…At the same time, the demand for children's services continues to rise year‐on‐year (Webb and Bywaters ). These twin pressures furnish an especially suitable context for examining whether political ideology is an important influence on government contracting, especially as local ideological differences may be accentuated during periods of fiscal challenge (Plata‐Díaz et al ).…”

“…Some studies suggest that ideological effects may be more nuanced and complex than the basic assumptions of the citizen‐candidate model and partisanship theory suggest. For example, Picazo‐Tadeo et al () find that in Andalusia, only municipalities controlled by an extreme left‐wing party (Izquierda Unida) are averse to privatization of water services, while Plata‐Díaz et al () show that only large left‐wing local government tend to keep social services in‐house. Importantly, partisan theorists increasingly acknowledge that “the policy preferences of left‐wing and right‐wing parties cannot be easily assumed, but need to be contextualized” (Häusermann, Picot, and Geering , 230).…”

Explanatory factors in the renewal of contracts for the privatisation of public services

“…In recent years, due in part to the current context of global economic and financial crisis, many local authorities have sought to achieve significant cost savings. Numerous studies have been conducted into how this goal may be achieved, and privatisation has been identified as an important mechanism in this respect (Zafra-Gómez et al, 2016b; Plata-Díaz et al, 2017).…”

Cost efficiency and financial situation of local governments in the Canary Isles during the recession

“…Cost efficiency and the factors that affect it have been widely considered in previous research (De Borger & Kerstens, 1996a, 1996bPrieto & Zofio, 2001;Balaguer-Coll, 2004;Balaguer-Coll et al, 2007;Balaguer-Coll & Prior, 2009;Benito et al, 2010;; Narbón-Perpiñá & De Witte, 2018a;2018b) ), seeking to identify inefficient activities and to establish models based on local authorities found to be relatively efficient. However, a more detailed understanding is needed of the relationship between cost efficiency and relevant financial factors, measured according to the concept of financial condition (Zafra-Gómez & Muñiz, 2010).…”

“…Flexibility is taken to be the organisation's ability to respond to changing economic and financial circumstances, within the limits of its fiscal capacity; this ability will be reflected in its reactions to such changes via increases in taxation levels, in public debt or in transfers received (Zafra-Gómez et al, 2009a, 2009bHendrick, 2011;Cabaleiro et al, 2013). Vulnerability is understood as the organisation's level of dependence on external funding in order to maintain public spending levels, via transfers, subsidies and grants (Carmeli, 2002;Atan et al, 2010;Cabaleiro et al, 2013; Government of Western Australia: Department of Local Government, 2013); Zafra-Gómez et al, 2009a, 2009bPlata-Díaz et al, 2017).…”