Contracting Out Government Services In Transaction Cost Economic

Contracting out of government services is that the mechanism of market competing intervenes in the provision of public services, public goods and services are produced by private sector not by government. Government transfers the function of public services production to private services through contract. At present, many countries in the world adopt contracting out to reduce government expenditure, hold back the size of government, improve the quality of public services. Although the study to contracting out has become focus of western public administration, it is blank in our country.Based on the economic cost, this article is to look for the critical factors determining contracting out, and how to administrate contracting out for government. This paper discusses the basic theory of contracting out firstly, then summarize pre-decision of contracting out on specific assets, task complexity and market competition. In the fourth part of the article , the capability of government after contracting and the ability of transitional government for contracting out are generalized. The last part receives conclusion and conceives of a vision.