Introduction
The United States has experienced a long and eventful history of administrative reform and
change. This history appears to be a product of the nation’s stateless legacy, which has kindled
numerous efforts to augment, modify, and even reduce administrative capacity at all levels of
government (Stillman, 1999). Administrative reforms in the United States have also been marked
by a struggle over competing visions about the proper size and role of the state in a democratic
society (Kaufman, 1969). For the last two decades, reform efforts in the United States have
emphasized smaller and more efficient government through privatization, especially contracting for
services or outsourcing (Savas, 2000; Hodge, 2000; Kelman, 2002; Donahue, 1989; Kettl, 1993).
Contracting for services is not a new approach or tool of governance, since its use among
American governments predates the founding of the republic (Cooper, 2003; Nagle, 1992). Notable
examples of contracting in the United States from the early 1800s include mail service and the
manufacturing of weapons and other military equipment
. The great expansion in the use of
contracting for services is a much more recent development, however. Since the 1980s, we have
witnessed a huge upsurge in contracting for services at all levels of government (Savas, 1987, 2000;
Osborne and Gaebler, 1993; Hanrahan, 1983; Kettl, 1993). This trend was sparked in part by the
rise to power of conservative political movements at home and abroad, as well as by poor economic
conditions and the need to develop efficient service delivery alternatives in order to relieve fiscal
stress.
Interestingly, some experts point to earlier periods as the start of the expansion of
contracting for services in the United States. Salamon (1995) explains that prior to the 1960s, the
responsibility for providing public services was shared among the voluntary sector and state and
local government. With the influx of major federal funding for heath and human services during the
1960s, the extent of contracting with the nonprofit sector increased significantly, a pattern that
increased further during the 1970s (see also Linder and Rosenau, 2000). According to DeHoog and
2
Convention