Paper/Speech Details of Conference Program for the 18th NISPAcee Annual Conference Program Overview I. Working Group on Local Government Author(s) Georg Sootla Tallinn University Tallinn Estonia Annika Uudelepp Title Contracting out at local level: Instrumental vs. institution building strategies File Paper files are available only for conference participants, please login first. Presenter Abstract The contracting out through competitive tendering in the public sector (Flynn 1993) emerged as a tool to increase efficiency of service provision and to reduce the scope of public sector. In new European democracies the contacting out becomes rather fashionable from the 1990-s onwards. (Nemec et.al. 2005, Ochrana et.al.2007) But in the absence of necessary economic and social-political preconditions its application frequently failed, not only because it provided fertile soil for corruption or forms of rent seeking, but also because of too narrow interpretation of possible purposes and impacts of contracting strategies. Internal markets (competition) and civil society (capacity for collective action) are precondition for successful contracting for private and non-profit organisations. They are, however, underdeveloped in CEE countries. In this context the competitive contracting cannot play its instrumental role: to become as the tool for reducing the scope of public bureaucracies as well as increasing effectiveness and choice, that are main roles of contracting according to the NPM ideology. Contracting strategy could be, however, used as the tool for the development of modern institutional patterns at the local level. This article intends to study the contracting out in the economic and institutional context when competitive tendering could be applied effectively only in limited cases and used as the tool for the development of modern institutional patterns at the local level. Firstly, primarily it can be used with the aim of internal decentralisation of communities which have extensive territory and small population; secondly, with the aim to activate the community and empower its members in solving their own problems (self-sustaining communities); the third, in developing various forms of non-government cooperation at grass-root level as well as regional level or even national level in ensuring local (welfare) service provision and in triggering the cooperation and partnership between authorities and agencies at the local level; the fourth, to feed back best practices of capacity building, networking and cooperation and customer orientation to the local authorities under the pressure of centralizing trends in central local relations and under the fiscal stress. Alongside with the competitive tendering the concept of relational contracting (De Hoog 1990) or obligational contractual relationship has been considered (Sato 1992). Hence we differ instrumental contracting which is aimed in achieving purely economic ends from contracting strategies which is oriented to different institution building purposes. Our attention in this article is focussed to contracting out services (Smith et.al. 2002) to non-profit organisations NGOs and foundations. We differ also non-profits or organisation with grass-root origins and ones that have been established with assistance of or by local authorities, in order to study whether and how top down triggers can serve the aims of empowerment and civil society building (Akkermann 2004). Our empirical study in Estonia is based on (a) on survey of local authorities (N=136 from 227) about practices of contracting out at their municipalities, (b) on the analysis contracts (N = 330) which is based on extensive qualitative structuring of them to establish main types of contracts, (c) three extensive focus group interviews that are intermediate orienting tools in the planning of (d) in depth case studies of six communities.
