Local Government Outsourcing: An Analysis ofthe Branch County Government
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For local governments with limited budgets, outsourcing may seem like a cost effective solution to budgetary constraints and fiscal stresses. However, privatization often comes with the fear that service quality will suffer in order to cut costs. This becomes a significant consideration for local government officials whose main objective is to provide the highest quality of services to their citizens. In addition to quality services and cost savings, there are a number of other potential factors affecting the decision process of local government officials to outsource away from public production. After examining the advantages and disadvantages of outsourcing, an empirical analysis will be done to assess whether or not certain internal factors correlate to a particular department outsourcing more or less than another department. In looking specifically at the Branch County Government in Coldwater, Michigan, an econometric model will be developed with the dependent variable being the number of services a department outsources.
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