Insourcing and/or outsourcing: How do they contribute to the public administration reform?

Outsourcing has proven to be one of the most enduring marketisation strategies that public sectors have ever pursued around the globe. It has been praised as a solution for delivering more efficient and effective public services by introducing competition, professional management tools and a sense of ownership into the realm of public administration. At the same time, empirical evidence has demonstrated that outsourcing carries substantial risks of waste, fraud, or poor service; it often hollows out the expertise and problem-solving capacity from the public sector. It may also lead to inflexibility and create coordination difficulties. Yet, over the course of the past several decades, the role of outsourcing in public sector outlays has slowly, albeit steadily, increased. Governments at all levels have increasingly turned from operating as direct service producers and providers to relying on a host of other actors – non-profit organisations, private firms, neighbourhood associations, volunteers, and other government organisations. There are important historical legacies at play here such as the New Public Management ideas or neo-liberal thinking in general (think of the reinventing government movement represented by Osborne and Gaebler or its more modest European version), but there are others too. Technology (especially ICT) is transforming the ways public services are delivered. However, governments themselves often lack state-of-the-art technology capabilities. The ongoing economic stagnation has led many governments to adopt severe austerity measures, which has put cost savings ahead of other public service goals. Moreover, citizens’ expectations towards personalised and more responsive public services have probably never been as high as today, paving the way for external providers, capable of delivering individualised services.

This trend has established an intriguing context for today’s public administration reform. On the one hand, governments are still struggling to develop sufficient capabilities to make intelligent ‘make or buy’ decisions and meet the promises made related to outsourcing. Consequently, a parallel trend has emerged where governments are increasingly contracting back in many of the previously outsourced services. Increasing reliance on external providers has also led to a concentration in the public service industry, making the bidding and relational capabilities, or rather the service quality-related capabilities, the main source of competitive advantage in many sectors. On the other hand, and taking into account the fact that outsourcing is applied at an increasing pace, there are still many opportunities which the current outsourcing practices tend to downplay. Today's so-called societal ‘grand challenges’ (e.g. related to ageing, energy, health, security or economic development) are extremely complex and assume new bold solutions on behalf of the public sector. Here, outsourcing (or public procurement in general) can be viewed as a potential tool to boost innovation, both in and through the public sector, but the current public administration routines and culture seldom support this kind of experimentation and risk-taking.

The focus of the 23^rd NISPAcee conference is on the evaluation of the concept of outsourcing (or externalisation, in broader terms), its successes, failures and challenges, with the focus on the conditions of transitional countries in the NISPAcee region. Theoretical papers from various perspectives, assessing the concept of outsourcing and its environment in the NISPAcee region, but especially empirical studies on processes and results, are invited.