Incentive power and authority types: towards a model of public service delivery

Substantial research has been conducted concerning the efficiency and efficacy of different modes of public service delivery and contracting out. This article develops a model of service delivery choice taking into account the distinction between public, private and non-profit organizations and the characteristics of the service to be delivered. Transaction Costs Economics has mainly debated the attributes of the technology involved in production and the required investments. In this article, considerations on the organizational nature of the actors participating in the process are added to this framework, pointing out that features of the internal structure and of the external mode of social control of organizational forms make them more suitable for providing certain services rather than others. The model is based on two dimensions: incentives power and authority types. Evidence from the contracting-out debate is used for discussing the implications of the model for the feasibility and efficiency of organizations in the service delivery.