Should Developing Country Governments Contract Out Service Provision?

....that depends on whether they can design a decent contract, is the message of a recent case study on Southern Sudan (which is also a fascinating recent history of the establishment of a new government).

"Fragile states" are stuck in a catch-22, where it might be nice in theory to compensate for weak government structures by contracting out for key services, but capacity doesn't exist within government to design an effective contract without getting ripped off.

Government has supported the process of contracting out key services, but has had limited capacity to design and manage contracts without external support. Even with World Bank administered contracts, Government has had limited capacity to ensure that the contract design and performance meet its own needs.

I'm not even so sure this is a problem of fragile states. I'm reminded of Private Eye, a British magazine usually full of stories about private sector contractors running rings around government.