What Determines the Formal Versus Relational Nature of Local Government Contracting?

Abstract

In this article, we examine the governance structures used to manage local service delivery contracts with an eye toward two specific concerns. First, we contend that public managers likely use dual regimes in which contract writing is more formal in nature than is the management style adopted during contract implementation. We also explore the determinants of such mechanisms. We find some evidence to support our contention in that managers frequently contact and communicate with their vendors despite the presence of clearly and formally written contracts. We further find that the formal versus relational nature of written contract features is influenced by different factors (service characteristics, market conditions, vendor ownership) than is management style (reputation, management capacity, expectations of continuing relationships).

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