Elizabeth A. Graddy

The Evolution of New Industries and the Determinants of Market Structure

Several empirical regularities concerning firm growth rates and industry firm-size distributions have been developed by studying primarily mature industries. The primary purpose of this article is to bring together and extend empirical regularities on the evolution of new industries and to use these regularities to gain further insight into the forces governing industry evolution. To explain these regularities, a model is constructed which emphasizes how factors governing the early evolution of industries may shape their market structure at maturity. It stresses how chance events and exogenous factors that influence the number of potential entrants to the industry, the growth rate of incumbents, and the ease of imitation of industry leaders will influence the ultimate number and size distribution of firms in the industry.

CONTRACTING OUT: FOR WHAT? WITH WHOM?

This paper develops a two-stage model of the decision to contract out. The first stage is the choice of whether to produce publicly provided services internally, externally, or to reduce costs as well as potential cost savings, which depend primarily on the nature of a particular service. The second stage in the contracting decision is the choice of sector with which to contract--other governments, private firms, or nonprofit organizations. Sector choice is primarily influenced by the nature of the service and the availability of suppliers in the different sectors. The model is used to analyze the current contracting patterns of 1,780 cities and counties from across the United States.

Community Foundations, Organizational Strategy, and Public Policy

This empirical study of the strategic direction of California community foundations explores how this choice is affected by organizational and community characteristics and by external forces. The authors develop a model of the determinants of organizational strategy in community foundations and analyze it based on interviews and on data collected on community foundations and their communities. They then consider the implications for public policy. Strategic choice was found to be affected by organization age, community stability, the professionalization of the field, and the growth in national competitors. They also consider the implications of these results for recent changes in local governance. Community foundations that have been established for some time and those located in communities that are stable are the ones that appear best positioned to enhance the problem-solving capacity of communities.

Community Foundation Development and Social Capital

The recent worldwide growth of community foundations presents new opportunities for community-based social change. Realizing that promise requires that community foundations sustain the charitable support of their communities with increasing competition for these resources, and thus an understanding of the connection between community characteristics and charitable giving is necessary. The authors focus here on the potential role of community social capital. This study develops and empirically explores a model that connects social capital and gifts to community foundations, while controlling for community demographics and the communitys exposure to charitable organizations. The authors find that per capita gifts to community foundations increase with the level of social trust in the community. In addition, gifts are affected by the number of years that community foundations have existed in the region, population density, homeownership, and the poverty rate. Implications are developed for community foundations and for our understanding of the different dimensions of social capital.

Structural Changes in the Hospital Industry, Charity Care, and the Nonprofit Role in Health Care

In an effort to understand the impact of cost-containment public policies on the relative roles of the sectors, the authors examine changes in the California hospital industry during the 1980s and associated changes in the provision of charity care. Industry structure and the relative strength of the sectors change as a result of industry entry, industry exit, and conversions (ownership changes across sectors). In the face of cost-containment policies, the nonprofit sector has been the most stable, with fewer exits than the for-profit sector and fewer conversions “out” than the public sector. This stability suggests that nonprofit hospitals are more likely to continue providing services as profit margins shrink. In addition, an analysis of the charity care behavior of converters suggests a stronger relationship between ownership and charity behavior than indicated by simple comparisons of the mean levels of provision, with committed nonprofits providing more charity care than for-profit hospitals.

A contractual framework for new public management theory

Abstract This paper evaluates the potential for institutional economics to help us frame choices for the design of institutional arrangements aimed at improving public sector performance, and the lessons it offers for the development of a new public management theory. It defines the key elements of transaction cost and principal agency theory and their application to the public sector. Local government contracting, fiscal decentralization, and performance budgeting, applications that share problems resulting from divergent objectives, information costs associated with policy making and implementation, and risks to public sector accountability, are analyzed. This analysis demonstrates that institutional economics can illuminate how public management can effectively utilize private sector solutions by providing the theoretical underpinnings for government reform initiatives.

Interest Groups or the Public Interest—Why Do We Regulate Health Occupations?

State regulation of occupations has become more prevalent even while its negative consequences are becoming understood. This raises questions about the source of such regulation and the extent to which the interests of the public are being represented. In my study of the regulation of health occupations, I explore the influence of organized interest groups, of the general public interest, and the structure of the legislature and the political environment. I analyze six health occupations (dietician, nurse-midwife, occupational therapist, physician assistant, psychologist, and social worker) and find that although organized interest groups do influence how these occupations are regulated, the public interest also plays an important role.

The Development of Community-Based Foundations in East Asia

Abstract Despite their increasing importance worldwide, community foundations remain rare in much of East Asia. This comparative analysis of three community-based foundations currently operating in Japan, China and South Korea seeks to understand the role they play and factors that promote or hinder their development. We examine the social and institutional contexts within which they operate, their goals and activities and their funding structure. We find that all three foundations focus on cultivating a philanthropic culture, and on addressing community needs either through grant making, direct service provision, or both. A regions philanthropic traditions, the vitality of its non-profit sector, the legal framework that defines the sector and the agenda of governments for the sector are central factors in the development of community-based foundations in East Asia.

State Budgetary Processes and Reforms: The California Story

This paper analyzes state budgetary processes and reforms to inform California budgetary policy. We consider key institutional provisions, including budget periodicity, tax and expenditure limitations, balanced budget and reserve requirements, and supermajority vote requirements, and analyze the extent to which changes are likely to advance procedural norms. Our analysis suggests that empirically unproven assumptions and poorly articulated linkages between budgetary processes and outcomes have undermined the states ability to understand the budgetary problem and identify effective reforms. We recommend a focus on procedural norms and related reforms that promote effective budgeting processes as a less partisan framework for reform.

CROSS-SECTORAL GOVERNANCE AND PERFORMANCE IN SERVICE DELIVERY

This paper considers the determinants of effective cross-sectoral partnerships for the delivery of publicly funded services. A multivariate model of the influence on service delivery effectiveness of the inter-organizational governance arrangements, the nature of interdependencies in service delivery, the intensity of interactions, the characteristics of the constituent partners, and the characteristics of the network within which the partnerships operate is developed and empirically analyzed. Using data on 138 partnerships operating within 26 networks to provide family preservation services in a major United States county, a random-effects model is estimated. Service delivery is found to be positively impacted when roles and responsibilities are contractually defined, when partners are viewed as trustworthy, and by the extent to which decision making, information, and resources are shared. More sector diversity within the network is associated with less effective service delivery, but the effect of sector diversity in partnerships is mixed.