The effect of Administrative Professionals on contracting out

First, by conducting sectoral regressions, it is shown that the apparent negative relationship between public employees in general and municipal contracting is partly reflecting the fact that the number of public employees is endogenous to contracting. Second, we suggest that administrative professionals and not bureaucrats in general have a positive impact on contracting.

This is because professional skills are vital for carrying out a tender, and because contracting is essentially a part of administrative professionals? bureau-shaping interests. Finally, we find support for two often discussed claims in the literature, namely the influence of prosperity and ideology.