Incentives Power and Authority Types: Towards a Model of Public Service Delivery

Substantial research has been conducted concerning the efficiency and efficacy of different modes of public service delivery and contracting out, which has yielded conflicting results. This article develops a model of service delivery choice taking into account the distinction between public, private, and non-profit organisations and the characteristics of the service to be delivered. Public management literature studying contracting out from a transaction costs economics perspective has mainly debated the attributes of the technology involved in production and about the required investments. In this article, considerations on the organisational nature of the actors participating in the process are added to this framework pointing out that features of the internal structure and of the external mode of social control of organisational forms make them more suitable for providing certain services rather than others. The model is based on two dimensions: incentives power and authority types. Both services and organisations can be analyzed in terms of these two dimensions and their sub dimensions. Evidence from the contracting out debate is used for discussing the implications of the model for the feasibility and efficiency of organisations in the service delivery choice.