Relational Versus Formal Contracting: Do Contracting Governments Adhere to Economic Wisdom?
19 Pages Posted: 6 Apr 2010
Date Written: April 6, 2010
Abstract
In this paper, we examine if local public managers adhere to the precepts of economic and contracting theory regarding how they perceive the nature of services (hard versus soft), the types of contracts they write (formal versus relational), and the contract management styles they adopt. We find support for theoretical expectations concerning the perceptions of services and the formalness of contracts. However, our results indicate that public officials adopt more relational styles of management for hard services than expected.
Note: The data collection for this project is ongoing. The analyses presented in this paper are based on the early returns. Hence, the findings are preliminary in nature and are best interpreted as such. That is, the results are subject to revision as more data are gathered.
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