Understanding reverse privatization in U.S. local governments

Objective. Reverse contracting is a rare event. Consequently, this research uses complementary log-log regression to analyze the probability of a local government internalizing previously contracted services. Methods. Data from the International City/County Management Associations 1997, 2002, and 2007 Alternative Delivery Surveys were paired and analyzed to detect changes in service delivery from one survey year to the next. Results. Using the Institutional Analysis and Development (IAD) framework as a guide, the results illustrate that the probability of a local government reverse contracting is a dynamic, complex occurrence that is contingent on previous contracting rates, previous mode of delivery, transactions costs, opposition to privatization, and financial factors that differ across governance structure and time. Conclusions. The findings of this research warrant the use of theories other than failure theories to explain shifts from indirect to direct delivery.