74 Pages Posted: 24 Sep 2021 Last revised: 17 Aug 2023
Date Written: March 23, 2023
Outsourcing public services to private providers is heralded for increasing government efficiency. Yet, outsourcing also offers opportunities to circumvent employment regulations in the public sector. The praised flexibility that private contractors have to hire employees can also be used to hire political supporters. I call the use of outsourcing for mobilization purposes patronage contracting. By exploiting close-elections regression discontinuities across Brazilian municipalities, I show that opportunistic mayors who engage in clientelistic practices outsource not only service delivery but also patronage jobs. Moreover, I demonstrate that this effect is driven by municipalities where mayors are pressured by stronger political machines. Pre-registered survey experiments with mayoral candidates further confirm these findings. This study presents a cautionary tale against the common assertion that outsourced services provide fewer opportunities for malfeasance. On the contrary, public-sector outsourcing can exacerbate government reliance on patronage appointments due to the reduced oversight of contract employees.
Keywords: patronage contracting, patronage jobs, outsourced public services, bureaucracy, clientelism, opportunistic politicians, health care
JEL Classification: D72, D73, H11, H75, I18, J45, L33
Suggested Citation: Suggested Citation