What Determines the Relationalness of Local Government Contracting?

Abstract:     
In this paper, we examine the governance structures employed to manage local service delivery contracts with an eye towards two specific concerns. First, we contend that public managers likely employ dual regimes in which contract writing is more formal in nature than is the management style adopted during contract implementation. We also explore the determinants of such mechanisms. We find some evidence to support our contention in that managers frequently contact and communicate with their vendors despite the presence of clearly and formally written contracts. We further find that the formalness versus relationalness of written contract features is influenced by different factors (service characteristics, market conditions, vendor ownership) than is management style (reputation, management capacity, expectations of continuing relationships).

Number of Pages in PDF File: 37

Keywords: contracting, relational contracting, formal contracting, governance, local service delivery

working papers series