Is CAR Data Better than ASD for Identifying Noncontractual Relationships?

• In Event: Working across Sectors

Abstract

In the field of local government studies, inquiries regarding what services local governments provide their citizens (e.g., Ostrom & Ostrom 1977; Peterson 1981; Tiebout 1956) or how they deliver them (e.g., Ferris & Graddy 1986; Stein 1993) have garnered considerable scholarly attention. Especially for the latter, academic interests have centered on explaining why and under what conditions local governments outsource their service production as opposed to delivering through their own bureaucratic apparatuses (e.g., Brown & Potoski 2003). While a variety of data sources have been utilized by scholars investigating this local service delivery decision-making, much of the development has relied on a single source – the International City/County Management Association’s (ICMA) “Profile of Local Government Service Delivery Choices” (also known as the Alternative Service Delivery [ASD] survey). These surveys are comprehensive and longitudinal in nature, which explains their attractiveness.

There are potential concerns regarding the heavy use of the ASD data in studying local governance, however. By design, the ASD survey does not allow responding jurisdictions to elaborate on the detailed aspects of delivery arrangements they make with external service producers. The instrument simply asks them to identify “who” produces a service (another government entity, a for-profit, or a nonprofit) if they deliver utilizing external vendors. The survey does not inquire about the nature of the legal, financial, and administrative structures of these external arrangements. Despite this limitation, scholars using the ASD data source often assume government-external provider relationships to be contractual. Based on our close review of the first two hundred hits resulting from a Google search on ICMA ASD data, 107 out of 110 cases (97%) that directly utilize the ASD data in their studies interpreted all forms of external service production as contracting. This impacts how they model such relationships, with principal-agent theorization being most common.

In a previous effort investigating the reliability of the ASD survey data, we found this interpretation to be problematic (Lamothe, Lamothe, & Bell 2018). Specifically, we uncovered that many services marked as delivered by other government entities were not contractual in nature. Instead, some governments had partnerships or other collaborative relationships with neighboring governments in delivering services. For others, governments that responded to the survey were not responsible for offering services at all, but relied on county governments or special districts for both their provision and production. Likewise, some services indicated as delivered by nonprofits were also not contractual. Nonprofits in these cases were partners rather than contract agents. Some nonprofits received grants or tax allocations (often small) from government for their services but were autonomous in their operation. None of these relationships resembled principal-agent dynamics and thus applying this lens is problematic.

Based on our findings, the purpose of the current study is to examine if another dataset, the state of California’s Cities Annual Report (CAR), might better assist us in identifying the true nature of delivery arrangements. While more limited in scope regarding the number of services, CAR provides more specific information regarding delivery arrangements, including revenue and expenditure information. By isolating jurisdictions that respond to both data sources (i.e., CAR and ASD), I will examine if CAR is helpful in better identifying the true nature of service delivery, with a specific focus on recognizing noncontractual relationships.


References

Brown, T. L. and M. Potoski. 2003. Transaction costs and institutional explanations for government service production decisions. Journal of Public Administration Research and Theory 13(4): 441-468.

Ferris, J., and E. Graddy. 1986. Contracting out: For What? With whom? Public Administration Review 46(4): 332-44.

Lamothe, M., S. Lamothe, and E. Bell. 2018. “Studying local service delivery arrangements: Is ICMA data reliable?” Public Administration Review 78(4): 613-625.

Ostrom, V., and E. Ostrom. 1977. Public goods and pubic choices. In E.S. Savas (ed.). Alternatives for Delivering Public Services: Toward Improved Performance, 7-49. Boulder, CO: Westview Press.

Peterson, P. E. 1981. City Limits. Chicago, IL: University of Chicago Press.

Stein, R. M. 1993. Arranging city services. Journal of Public Administration Research and Theory 3(1): 66–92.

Tiebout, C. M. 1956. A pure theory of local expenditures. Journal of Political Economy 64(5): 416-24.

Author

• Scott Lamothe, University of Oklahoma