Outsourcing, Discretion, and Administrative Justice: Exploring the Acceptability of Privatized Decision Making

This study explores what happens to administrative justice and to the acceptability of frontline decisions in privatized and marketized models of service. Through the case study of privatized welfare-to-work in Israel, it shows the fundamental tension between outsourced discretion and traditional conceptions of administrative justice in which the trustworthiness of decisions relies on the idea that decision makers have no personal interest in the outcome of their decisions. It finds that in the Israeli case, contractors' financial interests were widely perceived as putting their professionals into a conflict of interest, thereby undermining trust in their decisions. At the same time, the study finds the program's managerial performance mechanisms did not provide an alternative legitimacy argument for the acceptability of decisions. The study also analyzes the ways policy makers reconstructed the decision-making systems to regain public acceptance of frontline decisions, while discussing both the potential and the limits of legitimizing outsourced discretion in such complex public services.