The Co-Production of What? Consumption Goods, Investment Goods, and the Delivery of Public Services

Abstract

Public services co-production has been largely conceived within the theoretical framework of service management. This study argues that greater attention should be paid to the economic features of what is co-produced, especially whether client are called to co-produce consumption goods or investment goods. Building on the case of co-production of active labor market services in Italy, this study shows that issues related to the threat of ex post contractual opportunism and hold-up help explaining clients’ lack of willingness to invest money, time, and efforts in co-production when up-front investments are required before ‘proper’ co-production of public service delivery takes place.