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

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.