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Vertical Integration in Municipal Service Provision:
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Vertical Integration in Municipal Service Provision:
In-House Public Production of Previously Outsourced Services
Richard C. Feiock
Askew School of Public Administration
Florida State University
Tallahassee FL 32303
## email not listed ##
850-644-3525
&
Scott Lamothe
Department of Political Science University of Nebraska-Lincoln
## email not listed ##
402-472-5642
&
Meeyoung Lamothe
Department of Public Administration
University of Nebraska at Omaha
Tremendous attention has been given to contracting or outsourcing service productions. What has gone virtually unnoticed is that many of these services have experienced “vertical integration of production” where the service is taken in-house by the providing government. Building on three typologies of service characteristics that are prominent in the literature, we examine whether vertical integration is systemically associated with certain types of goods and test whether the likelihood of vertical integration increases when mismatches occur between the service types and the modes of service delivery. Vertical integration can also be a response to market conditions, capacities for production and administration within government, or political, preferences of public decision makers. Vertical integration is the product of transaction problems relating to the characteristics of goods, production agents, and markets. Empirical analysis of patterns of service production from 1997-2002 reveals that vertical integration of production is relatively more likely than additional contracting with private providers and almost as many services were brought in-house as contracted out in that period. The multivariate analysis reports finds services offered though joint production arrangements are most likely to be taken in house. The types of goods provide an incomplete explanation for local service delivery decisions; a more complete model highlights the role of jurisdiction level factors.
Paper presented at the annual meeting of the American Political Science Association, Chicago, IL, September 2-5. This work was supported in part by a grant from the Aspen Institute Nonprofit Sector Research Fund. We wish to thank Hee-Soun Jang for her comments and assistance in preparing the manuscript and to Simon Andrew, In-Sung Kang, Sang-Seok Bae and Moon-Gi Jeong for assistance with data collection.
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| | Authors: Feiock, Richard., Lamothe, Scott. and Lamothe, Meeyoung. |
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Vertical Integration in Municipal Service Provision:
In-House Public Production of Previously Outsourced Services
Richard C. Feiock
Askew School of Public Administration
Florida State University
Tallahassee FL 32303
## email not listed ##
850-644-3525
&
Scott Lamothe
Department of Political Science
University of Nebraska-Lincoln
## email not listed ##
402-472-5642
&
Meeyoung Lamothe
Department of Public Administration
University of Nebraska at Omaha
Tremendous attention has been given to contracting or outsourcing service productions. What has
gone virtually unnoticed is that many of these services have experienced “vertical integration of
production” where the service is taken in-house by the providing government. Building on three
typologies of service characteristics that are prominent in the literature, we examine whether
vertical integration is systemically associated with certain types of goods and test whether the
likelihood of vertical integration increases when mismatches occur between the service types and
the modes of service delivery. Vertical integration can also be a response to market conditions,
capacities for production and administration within government, or political, preferences of public
decision makers. Vertical integration is the product of transaction problems relating to the
characteristics of goods, production agents, and markets.
Empirical analysis of patterns of service production from 1997-2002 reveals that vertical
integration of production is relatively more likely than additional contracting with private
providers and almost as many services were brought in-house as contracted out in that period. The
multivariate analysis reports finds services offered though joint production arrangements are most
likely to be taken in house. The types of goods provide an incomplete explanation for local service
delivery decisions; a more complete model highlights the role of jurisdiction level factors.
Paper presented at the annual meeting of the American Political Science Association, Chicago,
IL, September 2-5. This work was supported in part by a grant from the Aspen Institute
Nonprofit Sector Research Fund. We wish to thank Hee-Soun Jang for her comments and
assistance in preparing the manuscript and to Simon Andrew, In-Sung Kang, Sang-Seok Bae and
Moon-Gi Jeong for assistance with data collection.
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