Alternative Methods of Service Delivery in Small and Rural Municipalities

Data from approximately 1,000 small, mostly rural municipalities in Illinois, New Hampshire, and Wisconsin address local choices on production and contracting arrangements for a wide range of services. The results suggest that the use of both for-profit contractors and cooperative agreements with other governments correlate negatively with population size. Small municipalities are less likely to use competitive bidding processes, compare costs between production options, or report that privatization produces savings. Median income, rural geography, and ideology show statistically significant associations with contracting decisions. Respondents generally consider themselves satisfied with services provided by contract, although satisfaction levels are lower than those associated with self-provision of the same services. Citizen satisfaction associated with services delivered by other governments is lower than those provided by private contractors, suggesting that no trade-off in service quality is directly attributable to for-profit contractors.