Breaking Up Is Never Easy: Managing Markets with dominant providers. A Case Study of Ambulance Service Contracting Out

A key challenge in contracting out is the managing of markets with dominant providers. Combining contract theory with the sociology of markets literature, a recent contracting case in the market for ambulance services is... [ view full abstract ]

A key challenge in contracting out is the managing of markets with dominant providers. Combining contract theory with the sociology of markets literature, a recent contracting case in the market for ambulance services is explored. Building on document analysis and interviews with 19 stakeholders, it is demonstrated how a Danish government succeeded in breaking a long-standing monopoly – only to discover that the implementation of the new contract was beset by other obstacles, largely stemming from the institutionalized structure of the market. The result ended up being what none of the actors had strived for in the first place: a return to government provided service delivery. Contributing to the contracting literature, that tends to emphasize the contract as such, it is concluded that the challenges of contracting out in markets with dominant providers cannot be adequately understood without recognizing the institutional conditions for the management of markets.