Does Fiscal Stress Induce Privatization? Correlates of Private and Intermunicipal Contracting, 1992–2002
Version of Record online: 25 JUN 2009
© 2009 Wiley Periodicals, Inc.
Volume 22, Issue 3, pages 459–481, July 2009
How to Cite
ZULLO, R. (2009), Does Fiscal Stress Induce Privatization? Correlates of Private and Intermunicipal Contracting, 1992–2002. Governance, 22: 459–481. doi: 10.1111/j.1468-0491.2009.01447.x
- Issue online: 25 JUN 2009
- Version of Record online: 25 JUN 2009
Using Census of Governments data, preferences for private and intermunicipal contracting by U.S. counties during the 1992–2002 period are modeled as a function of established economic and political factors. After distinguishing between private and intermunicipal contracting, there is no evidence that fiscal stress induces privatization. High debt levels are associated with fewer publicly delivered services, but counties with high debt are as likely to partner with neighboring municipalities as they are with private firms. Political factors are weak predictors of either form of contracting. The strongest and most reliable predictor of both private and intermunicipal contracting is the creation of new public services. These findings imply the strategic use of contracting for trial, temporary, or contingent services.