THE QUASI-MARKETS OF SOCIAL SERVICES: THE COMPETITIVENESS OF RUSSIAN NONPROFIT ORGANIZATIONS AGAINST FOR-PROFIT ORGANIZATIONS AND PUBLIC PROVIDERS Svetlana Suslova 23/09/2014

Motivation Public service delivery via quasi-markets has become one of the main elements of ‘new public management’ Nonprofits play a growing role in social service delivery because of their specific features Less attention has been paid to how nonprofit involvement in government social service develops in transition economies, such as Russia, than in developed countries 2

The aim: to investigate whether nonprofits are successful when they have to compete with other social service providers for government contracts 3

Theoretical Background The quasi-market implementation as a way to improve the efficiency of government (Le Grand; Kitchen; Domberger & Jensen; Lowery; Dehoog) The competition level in social service quasi-markets (Savas; Lamoth) and the factors of contracting out to nonprofits in advanced countries (Lamothe & Lamothe; Feiock & Jang; Hefetz & Warner) Nonprofits involvement in social service delivery (Kendall, Knapp & Forder; Feiock & Jang; Frumkin, Francois; Pestoff & Brandsen) 4

Data and Methodology Data on social services tendering in eight Russian regions over the period Sourse of the data: Official website of Russian Federation on procurement information, Final data set consists of 786 observations (‘consistent tenders’) Method: examination of tender bid evaluation records 5

Region Number of Nonprofits per 10,000 residents Region Number of Nonprofits per 10,000 residents Perm Region 33.2 Tyumen Region 10.7 Sverdlovsk Region 30.3 Tatarstan Republic 23.7 Novosibirsk Region 34.8 Lipetsk Region 16.3 Primorsky Region 34.5 mean 27.2 Kamchatsky Region 48.0 median 25.3 Table 1. Size of nonprofit sector in the Russian regions 6

Region Initial Number of Tenders Number of Consistent Tenders Share of Consistent Tenders, % Initial Number of Tenders per 100,000 residents Number of Consistent Tenders per 100,000 residents Perm Region Sverdlovsk R Novosibirsk R Primorsky R Kamchatsky R Tyumen Region Tatarstan Rep Lipetsk Region Table 2. Size of social service quasi-markets in the Russian regions 7

Region Number of Consistent Tenders Numbers of Tenders with Nonprofit Bidders Share of Tenders with Nonprofit Bidders, % Numbers of Tenders with Nonprofit Bidders per 100,000 residents Perm Region Sverdlovsk Region Novosibirsk Region Primorsky Region1000 Kamchatsky Region Tyumen Region Tatarstan Republic Lipetsk Region Table 3. The numbers of tenders with nonprofit bidders 8

No. of Bidders Region Average Perm Region Sverdlovsk Region Novosibirsk Region Primorsky Region Kamchatsky Region Tyumen Region Tatarstan Republic Lipetsk Region Table 4. Level of competition in tenders with nonprofit bidders 9

Types of Bidders Region Nonprofit and Nonprofit (No. of Tenders) Nonprofit and For-profit (No. of Tenders) Nonprofit and Governmental Organization (No. of Tenders) Nonprofit, For- profit and Governmental Organizations (No. of Tenders) Perm Region Sverdlovsk Region 231- Novosibirsk R Primorsky Region ---- Kamchatsky R Tyumen Region -1-- Tatarstan Republic Lipetsk Region 12-- Table 5. Bidders of the tenders 10

RegionPerm Regi on Sverd lovsk Regi on Novo sibirs k Regi on Prim orsky Regi on Kam chats ky Regi on Tyum en Regi on Tatar stan Repu blic Lipet sk Regi on No. of Tenders won by a Nonprofit Provider Share of Tenders won by a Nonprofit Provider, % Table 6. Competitiveness of nonprofit bidders 11

Conclusion (1) Significant discrepancies in the scope and size of the competitive bidding exist between these eight Russian regions The vast differences in the activity of nonprofit organizations as bidders, and in the intensity of competition between them and other providers in the regional social service quasi-markets were found 12

Conclusion (2) The structure of regional quasi-markets is the essential factor of nonprofit organization involvement In many cases, nonprofit organizations can be competitive in terms of competitive bidding in Russia Competitive bidding in social service provision in many cases, in the period in question, did not give nonprofit organizations the opportunity to enjoy their advantages as services providers 13

Thank you for your attention 14