The make-or-buy public strategy. The case of government delivery of international aid in Spain

Resumen

This paper seeks to answer the question of which international development projects are outsourced from the public bureaucracies when the contractor is a non-profit organization (NGO). The transaction cost economics framework is used to analyze the reasons underlying the outsourcing decision by isolating the transactional characteristics. The make-or-buy decisions made by the public agency in Spain for the international aid delivery projects during five years are analyzed. The results achieved shows that the international aid delivery projects developed as government subsidies present light formulation reports and more relevant contingencies than those developed through an NGO. This fact could make us suspect that the government subsidies are used to developed international aid delivery projects involving higher levels of complexity, uncertainty and asset specificity.