Reexamining the Relationship Between Fiscal Stress and Outsourcing

Zhiwei Zhang, Bryan Gibson, Josephine Gatti Schafer

Research output: Contribution to journalArticlepeer-review

8 Scopus citations


The determinants of outsourcing in local government are widely studied from a variety of frameworks. One concept consistently used to explain local government outsourcing is fiscal condition, with many noting that outsourcing is more likely when a local government’s fiscal condition declines into fiscal stress. Despite the ubiquity of this expectation in the outsourcing literature, several articles reviewed suggest that the findings for this relationship remain uncertain. As a result, the research presented in this article sought to examine and extend what is known about the relationship between fiscal stress and outsourcing in U.S. municipalities. The research includes previous measures of fiscal stress and adds new measures. In addition, it tries to overcome the limited theoretical testing of the relationship between fiscal stress and outsourcing by examining both direct and indirect effects of fiscal stress on outsourcing. It finds that municipalities in the United States that are experiencing fiscal stress are more likely to engage in outsourcing, particularly municipalities that are experiencing fiscal stress and have a positive evaluation of the external market to provide services.

Original languageEnglish (US)
Pages (from-to)22-46
Number of pages25
JournalPublic Performance and Management Review
Issue number1
StatePublished - Jan 2 2018
Externally publishedYes


  • fiscal stress
  • outsourcing
  • service provision

ASJC Scopus subject areas

  • Public Administration
  • Strategy and Management


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