Managing the public service market

Prescriptions for improving contracting focus on how public managers can negotiate, implement, and monitor contracts to enhance service delivery and save costs. Yet, the well-functioning markets that effective contracting requires cannot be taken for granted. All markets risk failure. Consequently, public managers must manage the market to ensure competition and the flow of information about vendor performance, effective contract practices, and so on. We supplement transaction-cost theory with scholarship on public management networks to evaluate refuse services in nine governments in the Columbus, Ohio, metropolitan area. Our analyses reveal that even in the case of refuse collection, where nonspecific asset investments and easily measured service outputs and outcomes enhance contracting success, public managers looking to improve service delivery still must manage the market and the network supporting it.