A Transaction Cost Economics View of DOD Outsourcing

François Melese · Raymond E. Franck

9 citations0/0 files storedCalhoun: The Naval Postgraduate School Institutional Archive (Naval Postgraduate School)

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Outsourcing and Supply Chain Management Public Procurement and Policy Military and Defense Studies

Abstract

Abstract : Many goods and services required for government operations can be provided through commercial markets. Public officials, therefore, face a number of make-or-buy decisions. Transaction Cost Economics (TCE) offers a useful foundation for characterizing make-or-buy decisions, which this paper explores. Our dual objective is to synthesize key principles of TCE and to apply TCE to federal outsourcing. One especially useful insight is that transaction costs vary widely, and depend in known ways upon the attributes of the outsourcing action. This means, among other things, that one size should not fit all in outsourcing decision processes.

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1937The Nature of the Firm 2008The Political Economy of the Rent-Seeking Society 1982Contestable Markets and the Theory of Industry Structure 2020A Course in Microeconomic Theory 1999Public and private bureaucracies: a transaction cost economics perspectives 1977Revenue structure, fiscal illusion, and budgetary choice: Reply 1980Lobbying and welfare 1971THE COST OF TRANSFERS

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