Service Delivery in Rural Municipalities: Privatize, Cooperate, or Go It Alone?

Choices in production and contracting arrangements for a wide range of services were studied using data from approximately 1,000 small, mostly rural municipalities from Illinois, New Hampshire and Wisconsin. Results suggest the use of both for-profit contractors and cooperative agreements with other governments correlate negatively with population. 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 choices. Respondents generally consider themselves ―satisfied‖ with services provided by contract, although satisfaction levels are lower than those associated with self-provision. Satisfaction associated with services provided by other governments is lower than satisfaction with services provided by private contractors, suggesting no tradeoff in service quality directly attributable to ―for-profit‖ contractors.