When Markets and Democracy Coincide: Perceived Sector Differences in Participation in Government-Funded Programs

Abstract

This article investigates the effects of participation on performance assessment in government, for-profit, and nonprofit organizations that deliver public services. In addition to examining the impact of participation on public assessments of performance, we also test the perceived tradeoff between efficiency and participation, as well as the sectoral differences in the participation-performance relationship. We conducted a preregistered vignette experiment using the context of US nursing homes where various organizational information, including participation opportunities, and sector of operation (public, for-profit, and nonprofit sectors) serve as key treatment manipulations. We find that participation plays a critical role in enhancing perceptions of organizations regardless of sectors, but government organizations may obtain greater benefits by pursuing participation, especially in improving public perception of bureaucratic effectiveness and efficiency. These findings suggest that participation is not only normatively desirable, but also practically beneficial for organizations. The findings from this study contribute to advancing our knowledge on public participation, sector differences, performance management, and public values. This research was pre-registered at the American Economic Association's registry for randomized controlled trials (RCT ID: AEARCTR-0011918 and URL hidden for peer review).