Does Privatising Provision Reduce Accountability for Public Services?

This paper shows how privatising service provision (shifting control rights and contrac-tual obligations to providers) can: (1) demotivate the government from investigating and responding to public demands, by allowing the provider to holdup the government's service adaptations; (2) demotivate the public from mobilising to pressure for service adaptations through an indirect holdup wherein the government pays an in ated adaptation price out of public funds. Strategic complementarity reinforces these eects and the accountability concern is further exacerbated when outsourcing contracts span an election, because oppo-sition parties that make service quality commitments would then face an extreme inherited holdup