Reforming Local Service Delivery by Contracting Out? Evaluating the Experience of Danish Road and Park Services

The use of privatisation and contracting out has constituted a major reform trend in local public service delivery for decades. This chapter evaluates whether there is evidence that contracting out has resulted in improved cost efficiency as argued by reform advocates. The empirical focus is delimited to local road and park services in Danish municipalities, which is an appropriate empirical setting for evaluating the reform outcomes due to the widespread and long-term use of private providers. The main finding is that contracting out has resulted in significant cost reductions. However, the effects are rather heterogeneous across various municipalities and the evidence suggests declining economic effects over time. We conclude that contracting out as a local service delivery reform seems to have “got rusty” over time.