Public Law by Contract - The Reluctant Creation of Private Markets for Welfare Service

Abstract

This article conducts an analysis into long term contractual practices for the outsourcing of social services. Until recently social services in Scandinavia have been provided by public entities on an administrative basis. With the primary aim to increase efficiency and reduce public budgets these tasks are however today to a large extend undertaken by private companies on the basis of long term contracts entered into with local governments (municipalities). This Nordic model for privatization of public welfare is not unconditionally successful. Municipalities seem to hesitate in giving effect to the rising private market for welfare services. They insist on an almost complete control with the performances of the private service providers in the full length of the contracting period. In the legal literature it has been suggested that there are public law limits to privatization. The analysis of contractual strategies and practices for contracting out public welfare in this article shows that there are limits in private law for the “publicization” of contracts and markets as well.

Keywords: Privatization, publicization, contracts, long term contracts, variations, social service, public law, private law, discrete transactions, contractual relations, license, concession