INSTITUTIONAL, IDEOLOGICAL AND POLITICAL INFLUENCES ON LOCAL GOVERNMENT CONTRACTING: EVIDENCE FROM ENGLAND
| Author | RHYS ANDREWS,IAN R. HODGKINSON,JOSE MANUEL ALONSO |
| Published date | 01 March 2016 |
| Date | 01 March 2016 |
| DOI | http://doi.org/10.1111/padm.12216 |
doi : 10. 1111/p adm .12216
INSTITUTIONAL, IDEOLOGICAL AND POLITICAL
INFLUENCES ON LOCAL GOVERNMENT
CONTRACTING: EVIDENCE FROM ENGLAND
JOSE MANUEL ALONSO, RHYS ANDREWS AND IAN R. HODGKINSON
Theories of contracting out offer contrasting perspectives on the noneconomic determinants of local
government contracting. Some suggest that ideological motives predominate, with contracting deci-
sions reecting the ideology of ruling parties. Others emphasize political motives, with govern-
ments responding to local preferences. In this article, we draw on ideas about isomorphic pressures
within organizational elds to examine whether institutional inuences might also affect contract-
ing behaviour.Using a spatial auto-regressive probit model, we evaluate whether mimetic pressures
as well as ideological and political motives shape the decision to contract out service provision in
English local governments. In addition, we analyse whether those factors also determine whether
contracting local governments decide to contract with a commercial rm or a not-for-prot provider.
The statistical results suggest that the decision to contract out is spatially dependent, and hence
reective of institutional forces. By contrast, political motives and market size considerations shape
with whom local governments contract.
INTRODUCTION
The varying commitment of public organizations to practices that policy-makers advocate
is a major concern for many governments, especially those favouring privatization and
service delivery innovations (Shipan and Volden 2012; Schmitt 2014). Local government
contracting, in particular, is regarded as an important means to cut costs and improve
the responsiveness of public services in countries across the globe (Bel and Warner 2008).
Despite the ongoing trend towards contracting out at the local level, not all govern-
ments contract out services to the same degree, with many preferring to retain services
‘in-house’. The motivations behind the decision to contract out (or not) are thus an impor-
tant area of ongoing theoretical and empirical study that can cast light on the forces that
shape decision-making in public organizations (Baekkskov 2011). Allied to the technical,
largely economic, arguments advanced in favour of contracting out, ideological and
political motives have also been shown to be important determinants of externalization
(Bel and Fageda 2009). At the same time, institutional inuences could shape contracting
decisions, ranging from direct regulation, to wider mimetic or normative pressures to
adopt successful or appropriate practices.
The policy diffusion literature has long pointed toward the role that institutional
factors related to geographical proximity play in shaping public policy implementation
(Mooney and Lee 1995; Berry and Berry 2007). In this article, we seek to illustrate the
relative importance of institutional isomorphism on public organizations by examining
spatial dependence in the contracting behaviour of English local governments. First, we
supplement the analysis of ideological and political inuences on contracting out with an
evaluation of institutional pressures on the decision to contract out. Second, we explore
whether institutional, ideological or political inuences are responsible for the decision
to contract with a commercial rm or a not-for-prot service provider.
Jose Manuel Alonso is at the Department of Economics, University of Cantabria, Spain. Rhys Andrews is at the Cardiff
Business School, Cardiff University,UK. Ian R. Hodgkinson is at the School of Business and Economics, Loughborough
University,UK.
Public Administration Vol.94, No. 1, 2016 (244–262)
© 2015 John Wiley & Sons Ltd.
INFLUENCES ON LOCAL GOVERNMENT CONTRACTING 245
According to Di Maggio and Powell (1983), organizations are profoundly affected by
the institutional forces that surround them, which lead them to adopt similar strategies,
structures, and processes in order to be perceived as legitimate. These ‘isomorphic’
pressures take three main forms: coercive (i.e. rules and regulations), mimetic (i.e. bench-
marking competition) and normative (i.e. shared values and norms). Organizations can be
coerced into adopting certain practices, seek to mimic those practices that are perceived
to be successful, or adopt practices that are generally regarded as ‘the right thing to
do’. Often organizations experience all three forms of isomorphic pressure (Matten and
Moon 2008). For local governments, coercive pressures may come from superordinate
authorities, especially higher levels of government, mimetic pressures from a desire to
keep up with one’s neighbours, and normative pressures from a wider climate of received
wisdom. Taken in combination, these isomorphic pressures are likely to result in gov-
ernments increasingly resembling each other, especially where geographical proximity
is high.
Although evidence on the ideological and political motives shaping local government
contracting is gradually mounting, few studies evaluate whether institutional inuences
play a role in contracting decisions (e.g. Villadsen et al. 2010; Hefetz et al. 2012). Still fewer
analyse spatial dependence in contracting behaviour (for a partial exception see Bivand
and Szymanski 2000). Yet research suggests that local government management practices
are inuenced by isomorphic pressures at the eld level (Ashworth et al. 2009; Villad-
sen 2013) and that local policy decisions are often spatially dependent (Brueckner 1998).
Hence, there may be good reason to expect geographical proximity to inuence contract-
ing decisions. In this article, we seek to address the following questions: Do pressures to
adopt legitimate organizational forms inuence the contracting behaviour of local govern-
ments? In particular, do governments copy the contracting practices of their neighbours?
And, to what extent are institutional, ideological and political inuences responsible for
the choice of contractor, as well as the decision to contract out?
To answer these questions, we carry out statistical analysis of the contracting out of
leisure services by English local governments in 2007. A spatial auto-regressive probit
model is applied to secondary data on local government contracting in order to determine
the relative importance of institutional, ideological and political factors on the decision to
contract out and on the choice of service provider.In the following section, we explore how
institutional inuences might lead local governments to mimic the contracting behaviour
of their neighbours, before going on to reect on the ideological and political inuences
that arguably shape contracting behaviour.Thereafter, we introduce the data and methods
used to carry out the study, and discuss the statistical results. We conclude the article by
considering the implications of the ndings from our study.
INSTITUTIONAL INFLUENCES ON LOCAL GOVERNMENT CONTRACTING
Classic theories of bureaucracy and public administration emphasized that due process
and administrative efciency were the key goals shaping organizational decision-making
(see, for example, Gulick and Urwick 1937; Simon 1976). Building on the insights of orga-
nizational sociologists, proponents of the ‘new institutionalism’, however, argue that the
primary objective of organizational decision-making in the public (and private) sector is
not necessarily better substantive performance, but greater legitimacy in order to meet
the expectations of key stakeholders in the environment (Scott 2014). Critically,new insti-
tutional theory suggests that the pursuit of legitimacy is likely to encourage a tendency
Public Administration Vol.94, No. 1, 2016 (244–262)
© 2015 John Wiley& Sons Ltd.
To continue reading
Request your trial