Th e Decision to Contract Out: A Study of Contracting for E‐Government Services in State Governments

Abstract

Government contracting, especially for information technology products and services, has accelerated in recent years in the United States. Drawing on the insights of privatization studies, the authors examine the economic and political rationales underpinning government decisions to contract out e‐government services. This article tests the extent to which economic and political rationality influence governments’ contracting decisions using data from multiple sources: a survey conducted by National Association of State Chief Information Officers, a survey by the National Association of State Procurement Officers, the Council of State Legislatures, and macro‐level state data from the U.S. Census Bureau. Important factors affecting the state‐level contracting decision are population size, market size, the competitiveness of the bidding process, the professional management of contracts, the partisan composition of legislatures, and political competition. Political rationales appear to play a major role in state contracting decisions. Some arguments associated with markets and economic rationality are clearly politically motivated.