What brings contracting back in-house? A synthesis of international evidence

Abstract

Contracting back-in has received growing scholarly attention, but there is little empirical consensus in the literature as to what drives governments to bring previously contracted work back in-house and to what extent. This study performs a meta-analysis to synthesize 332 effect sizes from 16 existing studies concerning the antecedents of contracting back-in across different countries. The analysis indicates that contracting back-in is a market management strategy driven by low levels of market competition, high proportions of for-profit contractors, insufficient cost savings, and inadequate contract management. Meanwhile, contracting back-in is a political move shaped by left-wing political ideology and employee opposition to outsourcing. Environmental factors including unemployment rate, population size, and population density also play a role. This study provides empirical generalizations of previous results and contributes a more coherent knowledge base for future studies. Points for practitioners Our analysis indicates that contracting back-in is driven by a mix of both pragmatic and political factors, but pragmatic factors related to contracting management complexity shape contracting back-in in a more forceful way. Our findings also suggest that factors pushing governments to contract out do not necessarily have an impact on contracting back-in. Government decisions to contract out and contract back-in may be based on different considerations.

What brings the state back in? An examination of contracting reversal

“…Essentially, contracting back-in represents the move of public service delivery from the private market back to the administrative state (Clifton et al. , 2019; Lu and Hung, 2021). Existing studies document that contracting back-in occurs in many countries around the world, including Australia, Canada, China, Denmark, France, Italy, the Netherlands, the United Kingdom and the United States (Damanpour et al.…”

“…However, in recent years, there is a steady increase of studies documenting the emergence of "contracting back-in," that is, governments bringing previously contracted services back in-house and once again relying on public employees to deliver these services [1]. Essentially, contracting back-in represents the move of public service delivery from the private market back to the administrative state (Clifton et al, 2019;Lu and Hung, 2021). Existing studies document that contracting back-in occurs in many countries around the world, including Australia, Canada, China, Denmark, France, Italy, the Netherlands, the United Kingdom and the United States (Damanpour et al, 2020;Gradus and Budding, 2020;Hefetz and Warner, 2004;Ohemeng and Grant, 2008;Wang et al, 2018;Wollmann, 2018;Young and Macinati, 2012).…”

A replication of “exploring and explaining contracting out: Patterns among the American states”

“…Overall, the study contributes significantly to the literature on government contracting. It provides a comprehensive examination of three key questions on government contracting, all of which are still being studied and debated by scholars in public administration (e.g., Alonso et al, 2016;Bel & Fageda, 2017;Lu & Hung, 2021;Petersen et al, 2018;Rho, 2013). The ASAP survey also asked respondents whether their agency contracts with different types of organizations, including other governments, non-profit organizations, and for-profit businesses.…”

“…Overall, the study contributes significantly to the literature on government contracting. It provides a comprehensive examination of three key questions on government contracting, all of which are still being studied and debated by scholars in public administration (e.g., Alonso et al, 2016; Bel & Fageda, 2017; Lu & Hung, 2021; Petersen et al, 2018; Rho, 2013).…”

Backsourcing in the private and public sectors—A systematic review

“…Backsourcing has not been studied for as long as outsourcing, nor to the same extent and intensity (Young & Macinati, 2012;Oshri et al, 2019;Mederos, 2021). In particular, there is a lack of studies of backsourcing in the public sector (Berlin et al, 2022;Carlström et al, 2023;Lu & Hung, 2021). This is unfortunate as, in line with the public sector assimilating management models from the private sector, both out-and backsourcing have become an important component in public management (Von Bary & Wester, 2018).…”