Professional Management and Local Government Service Delivery: Strategic Decisions Across Alternative Markets

Local governments explore alternative delivery strategies for their service portfolios by engaging both private markets of for-profit firms and public markets of intergovernmental agreements. This study investigates the critical role of professionally structured local governments in selecting between these alternative markets. The analysis of national data on U.S. local government for the year 2007 includes new measures of management motivators and obstacles to contract with both for-profit and intergovernmental agents, as well as new measures for transaction cost, citizen interest, and market competition for the full portfolio of services provided by local governments. The study finds that council-manager governments are more responsive to market competition and citizen interest, and manage political motivation and opposition by exploring alternative forms of service delivery. However, public intergovernmental contract markets are a means to address management difficulties for governments of both types.