Defection Vulnerability of Services and Inter-governmental Agreement for Public Service Delivery


Transaction cost approach explains that the government’s external service production mechanism is determined by two chracteristics of goods and services, asset specificity and measurability. Previous studies have treated each transaction cost characteristic as distinctive determining factors for dependency and defection risks, which eventually affect governments’ preferences of public service production mechanism betwen external and internal productions. However, this study argues that both measures can better capture the nature of transaction risks government should run when those are combined.

Korean Administration Quarterly, 31(2) 343-361