Monitoring costs in local service provision. Comparing contract forms in Poland

Abstract

ABSTRACT This paper adopts a transaction costs (TCs) approach towards analysing the transactions of local governments in the service sector. The objective of the paper is to expand the analysis of the TCs concept by going beyond the conventional service-type-driven models. This study examines the cost of monitoring (MC) service contracts in Poland as perceived by local government officials, focusing on different forms of externalisation. The research involves utilising quantitative methods to examine how five distinct governance structures influence perceptions of TCs. The study suggests that the entity type, whether a public or private agent, affects the perceptions of monitoring costs in contractual agreements. The research found that the monitoring costs associated with public sector contracts are perceived to be higher than in public-private transactions, challenging previous findings. Further research on Inter-Municipal Cooperation should focus on the final product quality monitoring area, representing the most costly aspect of multi-principal structures.