This research proposal concerns the efficient provision of subsidized public services by private firms in collaboration with public agencies. Simply put, the research question is: what does society gain or lose when we move from one to another way of organizing transactions in a public transport market?

The Swedish public transport system is chosen as the empirical case since it has been and continues to be one of the most deregulated in the EU. Nowadays most subsidized public transport services in Sweden are procured in competitive tendering procedures.
The aim of the project is to analyze and measure the relative merits of different forms of market organization in the provision of public transport.

The research method is a comparative case study that will use statistical material and a survey.

We study three effects of using the market: transaction costs, factors that influence transaction costs and transaction benefits. Transaction costs are either observable in the form of for example contracting costs, or can be studied as latent phenomena by observing factors that create them. The benefits of using the market consist most importantly of competition, transparency, and specialization.

The project will develop measures for the three factors above and analyze how important they are in different types of contracts, from gross cost contracts to various forms of incentive-based contracts and negotiated contracts.