Abstract

Government purchase of services is considered to be a service delivery mechanism that can improve efficiency and economize costs. This mechanism has been popularized all over the world. However, at the same time, “reverse marketization” has been a common occurrence in the past few years. According to some scholars, “reverse marketization” is evidence of market failure, so they object to outsourcing contract in public services. This paper classifies market failure into four types and makes a case analysis of one of the four types. The case of reserve environmental sanitation service contracting testifies that in the model of low defect of supplier and low defect of demander, market failure will not inevitably give rise to “reverse marketization”. The direct cause is deficiency in management of the government. With regard to the actual situation of government management, this paper also puts forward the viewpoint that the government should act as “an open-minded purchaser”.

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