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Social services outsourcing to the non-profit sector: Economic analysis
https://doi.org/10.32609/0042-8736-2022-2-95-119
Abstract
Drivers and factors of social service outsourcing to non-profits are identified and discussed. A key point of the discussion of the choice between for-profits and non-profits as outsourcing partners is whether the quality of the service is observable and verifiable by third parties. In the case of unobservable/ unverifiable quality, market incentives could be misaligned with social welfare, and non-profits gain an advantage over for-profits. Cross-country analysis reveals factors explaining variations in non-profit outsourcing. All else equal, more outsourcing is observed among nations with efficient public sector governance and strong civil society. A theory is presented to compare cost, quality and social welfare between contracting-out to for-profits and non-profits. Theory findings and predictions are illustrated by the case of outsourcing of long-term care to for-profits and non-profits, using recent evidence from the COVID-19 pandemic.
About the Authors
N. V. Zobernyus
DV Consulting
Russian Federation
Russian Federation
Nikolai V. Zobernyus
Москва
L. I. Polishchuk
HSE University
Russian Federation
Russian Federation
Leonid I. Polishchuk
Москва
I. L. Shagalov
HSE University
Russian Federation
Russian Federation
Igor L. Shagalov
Москва
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For citations:
Zobernyus N.V., Polishchuk L.I., Shagalov I.L. Social services outsourcing to the non-profit sector: Economic analysis. Voprosy Ekonomiki. 2022;(2):95-119. (In Russ.) https://doi.org/10.32609/0042-8736-2022-2-95-119
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