Does not‐for‐profit corporatization of local public services improve performance?

Abstract

Abstract The corporatization of local public services is an increasingly common public management reform worldwide. This study investigates whether a shift from in‐house to not‐for‐profit corporatized service provision can result in improvements across multiple dimensions of performance. To do so, we examine the staggered adoption of Arms‐Length Management Organizations (ALMOs) to provide social housing by a third of English local governments during the period 2000 to 2008. Utilizing a Differences‐in‐Differences (DiD) with Multiple Time Periods (MTP) approach, we find that corporatized social housing outperformed in‐house provision on service quality, citizen satisfaction, and environmental sustainability, with little evidence of worse achievements on other performance dimensions. Event history analysis suggests performance benefits emerged around 2 years after corporatization occurred. Our study therefore implies that not‐for‐profit corporatization is potentially an effective strategy for improving local public service performance.

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