This study explores the outcomes of contractual relationships between American local governments and private service providers. Researchers have approached the issue of contract administration and performance from a variety of theoretical perspectives, each providing its own insight into how to manage contractual relationships effectively. The analysis, which is based on a unique data set of more than 400 contractual relationships, focuses on the effects of contract monitoring, competition, and trust on contracting performance. The results of the analysis indicate that trust has an independent positive effect on overall contracting performance, as well as on eight specific dimensions of performance. In most of the models tested, monitoring and competition were not related to contracting performance. The relationship between monitoring and contracting performance appears to be more complex than previously thought, involving interactions with moderating variables.
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