Salamon (2002), “purchase-of-service contracting has long been a central feature of America’s
human service delivery system, but it expanded massively during the 1960s and 1970s, especially in
the Northeast and Midwest, where a longstanding tradition of government-nonprofit cooperation to
address social and economic problems has long existed” (pp. 319-320). Kelman (2002) goes back
even further, attributing the boom in contracting to the start of World War II and the growth of the
defense and information technology industries during the 1950s. Today, by most indications, the
use of contracting for services has become widespread in the United States, with privatization
having become firmly entrenched in our system of governance (Kettl, 2002; Donahue, 2002;
Kelman, 2002; Martin, 1999; Brudney, et al., 2005).
As the previous discussion indicates, contracting for services has been a common feature of
the American local government landscape for some time now. Numerous studies and publications
have addressed a variety of issues relating to local government contracting (see Greene, 2002;
Rehfuss, 1989). Perhaps the most prominent stream of research on local government contracting is
a set of empirical studies conducted during the 1980s and 1990s that explored the determinants of
contracting for services at the local level. Although their findings have been somewhat mixed and
inconclusive (Boyne, 1998), these studies have served to identify various sets of factors that account
for the use of contracting by local governments, including fiscal stress, political and ideological
factors, service supply and cost factors, and demographic changes in a community.
In this article, we set out to model the use of contracting for services by American local
governments. We believe there is sound justification for furthering and improving this line of
research. First, recent findings suggest that attitudes about privatization have changed since the
1980s, and that privatization has become less politically controversial and more accepted as a
service delivery approach (Brudney, et al., 2005; Warner and Hebdon, 2001; Auger, 1999).
Managerial factors, such as the ability to plan for and monitor contracting initiatives, may have
trumped political concerns as determinants of contracting for services at the local level. We employ
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