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Contracting Out: Promise and Performance

Published online by Cambridge University Press:  01 January 2023

John Quiggin*
School of Economics, Australian National University


In this paper, it is argued that the benefits of competitive tendering and contracting have been overestimated, and that many of the apparent benefits actually reflect transfers rather than efficiency gains. Moreover, if arrangements for competitive tendering and contracting yield an inappropriate allocation of risk, such policies can reduce welfare rather than enhancing it as is commonly claimed. A number of case studies are presented to illustrate the latter proposition. Finally, some recommendations are presented for improvements in policy with respect to competitive tendering and contracting.

Research Article
Copyright © The Author(s) 2002

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The author would like to thank Nancy Wallace for her helpful comments and criticism.


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