The Benefits and Drawbacks of Government Contracting

Government contracting can greatly facilitate the goals of various NGOs operating in developing countries, while also making up for weak political or economic institutions. However, the “inherently political process” of contracting also presents unique problems (Zaidi, Mayhew, Cleland, et al, 2012, p. 571). Government contracting can impede social justice, though, and exacerbate the repercussions of neoliberalism. As Schuller (2009) points out, NGOs strengthen neoliberal institutions, have the potential to undermine elected governments, and can widen wealth disparities. Therefore, government contracting of services like healthcare can be promising but must be implemented judiciously to avoid undermining core goals like public health or social justice.
 The fundamental concerns that a nonprofit should examine if it is considering engaging in governmental contracting include an examination of the political climate and market forces, with a strong regard for procedural transparency. Zaidi, Mayhew, Cleland et al (2012) show how NGOs operate within a broader policy climate that can constrain their efficacy. NGOs may need to operate with greater independence than contracting would allow. Moreover, government contracting can create acute and long term problems when services are market-driven as opposed to driven by social justice goals. Zaidi, Mayhew, Cleland et al (2012) advise an incremental use of “fewer and smaller contracts” to build relationships and test market stability (p. 579). The contracting process needs to be more transparent to ensure that democratic process is not eroded in fragile governments, and NGOs also need to take responsibility for their own role in helping to strengthen local institutions rather than creating a system of artificial dependency. If government contracts are used wisely, though, they can make up for many of the inherent economic and political weaknesses in developing countries. Contracting can reduce the costs associated with implementing essential services in areas with poor infrastructure and can have important beneficial effects on boosting public health and local economic growth.




References

Schuller, M. (2009). Gluing globalization: NGOs as intermediaries in Haiti. PoLAR: Political & Legal Anthropology Review, 32(1), 84–104. 
Zaidi, S., Mayhew, S. H., Cleland, J., & Green, A. T. (2012). Context matters in NGO–government contracting for health service delivery: A case study from Pakistan. Health Policy and Planning, 27(7), 570–581. Retrieved from http://heapol.oxfordjournals.org/content/27/7/570.full