Dynamic-opportunistic behaviour in local government contracting-out decisions during the electoral cycle

The political hourglass: opportunistic behavior in local government policy decisions

“…In this respect, Nordhaus (1975) and Bastida, Beyaert, and Benito (2013), among others, claim that political decisions may change according to the current moment of the political cycle. Specifically, policymakers will prioritize their own interests when elections are imminent, in order to secure reelection (Veiga and Veiga 2007;Benito, Bastida, and Vicente 2013), and so their decisions will not necessarily be taken with a view to the general interest of the population (De la Higuera-Molina et al 2019). In this respect, public managers can make use of various instruments and policies to further their own interests (Foremny and Riedel 2014), such as decisions related to public debt (Geys 2007;Benito et al 2013) or to budgets and taxes (Persson and Tabellini 2003;Klomp and De Haan 2013;Bastida et al 2013).…”

“…Research has shown that citizens tend to have a negative perception regarding the participation of the private sector in the management of local public services. There seems to be the perception that the cost and quality of the service will be worse when this is implemented by the private sector (Donahue and Miller 2006;Garrone and Marzano 2015;Baekgaard and Serritzlew 2016;De la Higuera-Molina et al 2019). Hence, the choice of the organizational forms that governments use to implement public services may be influenced by the opportunistic behavior of the public manager or the politician in charge of the decision.…”

“…Citizens usually oppose the participation of the private sector in the delivery of public services in the belief that the services provided through this type of management have a higher price than those provided via a public-sector organization (Rubin 1998). In this vein, another recent study suggested that public officials may engage in opportunistic behavior when contracting out the delivery of public services (De la Higuera-Molina et al 2019). Public officials are aware of the negative perceptions aroused among the electorate by the participation of the private sector and so they prefer to avoid such measures when elections are imminent (Garrone and Marzano 2015).…”

“…Another argument that has been proposed to explain this negative perception of the private sector is that service quality falls when the private sector becomes involved in the service delivery, because the private provider will seek to reduce costs in order to increase revenues. Another significant factor is that many contracting out operations are accompanied by the introduction of a new fee for the service, or an increase in the existing one (L opez-Hern andez et al 2018;De la Higuera-Molina et al 2019). In addition, it has been argued that changes in management methods to incorporate private sector operators in the provision of local public services may also enable opportunistic behavior by the operator, such as deficient service and/or abusive pricing (De la Higuera-Molina et al 2019).…”

“…the stage of the political cycle. Studies have analyzed the effects of opportunistic behavior on contracting out decisions (Fern andez, Ryu, and Brudney 2008;Garrone and Marzano 2015;De la Higuera-Molina et al 2019), but to our knowledge none has expanded this focus to include other organizational forms and thus better reflect the reality addressed by public managers. The aim of this study is to advance our understanding of how public sector decisions are made, by examining whether politicians engage in opportunistic behavior in choosing management forms for the delivery of public services.…”