How does competitive tendering and contracting affect satisfaction with municipal health and care services?

Abstract

In this article, an investigation is made into the relationship between competitive tendering and contracting and satisfaction with health and care services in Norwegian municipalities. There is an ongoing public debate concerning privatization and contracting as a way of providing municipal services. Several studies suggest improved productivity, as well as service quality, as a result. Based on public choice and property rights theories, public organizations are argued to be inefficient. Thus far, we have little knowledge about the effects of competitive tendering and contracting on citizens’ evaluations of the services exposed to competitive tendering and contracting. To explore this, data from the Norwegian Citizen Study, covering over 35,000 individuals, are employed. The findings show that citizens and users are more satisfied with health and care services that are subject to competitive tendering and contracting compared to those provided solely by the public sector.