Government Contracting with Faith-Based Providers: An Economic Perspective
27 Pages Posted: 6 Apr 2006
Date Written: October 2005
This article analyses the policy debate surrounding the possible expansion of government contracting with faith-based providers of social services, from the perspective of recent developments in the economics of contracts. It presents a non-technical introduction to the economic tools used in the study of contracts, in particular the decision faced by governments of whether to provide services in-house or to contract out to a private nonprofit organization. In particular the paper looks at the problems of monitoring the quality of service provision and ensuring fairness in the procurement process. When the analysis is applied to the question of faith-based provision, the conclusion is that monitoring the terms of the contract is less of an issue than the debates that will arise over the distribution of contracts across different faith-based organizations.
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