Private Contractors as a Source for Organizational Learning: Evidence from Scandinavian Municipalities

Abstract The widespread use of government contracting opens up learning opportunities in public organizations’ engagements with private contractors. However, whether public organizations utilize these opportunities to improve their practices has scant coverage in the government contracting literature. We adapt insights from the organizational learning literature, develop an argument on the learning logic in government contracting, and examine manager perceptions of learning outcomes and whether intra- and inter-organizational and contextual conditions shape the learning outcomes. The argument is assessed against survey data reporting on the municipal park and road managers’ contracting experiences in Scandinavia. The findings show that government contracting in the context of the study is associated with positive learning outcomes and indicates possible tradeoffs between conventional cost-driven and learning strategies. The implications contribute to discussions about the role and benefits of government contracting beyond cost savings in the post-NPM reform era.