Does Citizen Sector-based Preference Relate to Citizen Satisfaction with Public Service Organizations?

Abstract

Scholarly attention has predominantly focused on citizens’ evaluations of public service organizations that deliver government-funded services, particularly in single-sector public service provision. As a result, we have limited understanding of how multisectoral provision operates from a citizens’ perspective. Against this backdrop, this study explores how citizens disparately evaluate their providers, which varies according to their preferred sector in multisectoral public service provision. Using a nationwide observational survey on Korean public childcare, where citizens’ sector-based preferences have long been recognized, the findings reveal that parents’ evaluations of providers were contingent on their preferred sector types. The evidence contributes to a more nuanced understanding of citizens’ evaluations of services in multisectoral public service provision.

Keywords

multisectoral provision of public service citizen sector-based preference citizen satisfaction citizen expectation public service organizations

Introduction

In recent decades, private organizations have played an essential role in the delivery of public services. In this context, a public service organization identifies government vendors that provide fully or partially funded government services to citizens regardless of the sector they belong to (Lee & Kim, 2023; S. P. Osborne, 2018). The expansion of the private provision of public services is grounded in the (often contentious) argument that private sector organizations are better equipped to meet citizens’ specific needs as they are more likely to focus on providing the services demanded by users (Amirkhanyan et al., 2008; Bromley & Meyer, 2017; Weisbrod, 1989). The phenomenon has become more critical in light of customer-oriented reform in government services (D. Osborne & Gaebler, 1992). Subsequently, governments have included diverse sector actors, such as public, nonprofit, and for-profit organizations, and they have managed the mix of bureaucracy, markets, and networks accordingly (Rhodes, 2015). At the same time, substantial attention has been devoted to how an emerging collaborative decision-making process operates from a citizens’ perspective (Lee & Esteve, 2022; Jo, 2023).

It is unclear, however, whether governments’ increased reliance on private organizations has improved citizens’ evaluations of private sector organizations in terms, for example, of satisfaction (Dahlström et al., 2018; Hodgkinson et al., 2017). It unclear as well whether governments’ increased reliance on diverse sectoral organizations has improved citizens’ evaluations of public services (Fountain, 2001). Among illustrations of empirical studies, Dahlström et al. (2018) observed the negative relationships between outsourcing and citizen satisfaction, while Hodgkinson et al. (2017) found that public, nonprofit and private ownership offered no direct benefits for citizens’ service satisfaction. Furthermore, citizen satisfaction varied when nonprofit and for-profit sector organizations sought to achieve shared goals with governments (Lee & Kim, 2023). Gaps remain in understanding of citizens’ assessment of public service organizations, a more complex process than commonly understood. Against this backdrop, this study investigates whether and how citizens’ sector-based preferences for a service organization relate to their evaluations of its performance.

The remainder of this article is organized as follows. First, we present a theoretical argument about citizen sector-based preferences for public service organizations, which is relevant to the case of multisectoral provision of public services this study examined. Then, we explore how citizens’ sector preferences for providers shape their satisfaction with service providers. The third section discusses the institutional background of Korea’s public childcare delivery systems, in which the government distributes fully funded services to its citizens through providers across the public, nonprofit, and for-profit sectors and assesses citizens’ satisfaction through a nationwide survey. Subsequently, this article discusses the data, model, and measurements used in analyses, followed by the results from the Nationwide Survey of Childcare. Finally, we discuss study’s contributions and its limitations, which can inform future research.

Theoretical Framework and Hypotheses

Multisectoral Provision of Public Services

In many countries, governments have increased their reliance on nonprofit and for-profit contractors in delivering public services through privatization, contracting out, voucher schemes, and allowances (Blanchard et al., 1998; Warne & Hefetz, 2008). Many newer mechanisms of public action involve collaboration with third-party actors beyond basic government functions (Salamon, 2002; Song et al., 2017) and use of indirect market-based policy instruments, which are categorized further as supply-driven (i.e., contracting out or privatization) and demand-driven (i.e., voucher schemes and allowances) (Lee & Shin, 2023).

Unlike supply-driven instruments, demand-driven ones offer citizens purchasing power that covers the difference between the costs of in-kind services or goods and what citizens can afford to purchase them. Their application can be observed in numerous service domains, including housing, food, childcare, primary and secondary education, higher education, employment, training, and medical care (Fotaki, 2009; Lee, 2023). The rise of these demand-driven policy instruments has led nonprofit and for-profit organizations to play important roles in delivering government-funded services alongside public sector organizations.

Previous studies have noted that in most countries, citizens have particular preferences concerning the sector of service providers across several service domains (Drevs et al., 2014; Hvidman & Andersen, 2014; Marvel, 2015). In childcare, it is worth noting that parents generally hold ingrained views that privately run or funded for-profit organizations focus on maximizing profits in the long run. In contrast, public organizations are accountable to government officials because they are publicly funded, and nonprofit organizations are accountable to a voluntary board (Mauser, 1998). Consequently, citizens’ preferences for providers in different sectors can serve as a critical indicator for shaping their evaluations of those providers.

Citizen Sector-based Preferences of Public Service Organizations

With respect to the multisectoral provision of services, citizens have choices within a range of sectors when choosing a provider. In turn, citizens will prefer a particular sector, considering comparable providers. This contrasts with single-sector public service delivery (i.e., usually public organizations and state or local governments), where citizens know which providers they receive services from and anticipate the level of performance of such providers.

Accordingly, a citizen’s sector-based preference in the multisectoral provision of services can be understood as a type of subjective expectation—the performance that an individual desires and wants to happen (Santos & Boote, 2003). It is similar to the concept relating to ideals such as aspirations, desires, or preferred outcomes, which are noted as being distinct from predictive expectations (Poister & Thomas, 2011) and the level of performance citizens think should be provided (James, 2011; Petrovsky et al., 2017). The idea of subjective expectations is not new and can be described as a type of expectation that overlaps and develops in a hierarchical sequence; predictive expectations have been discussed as “objective” predictions and other peripheral expectations as “subjective” predictions (Santos & Boote, 2003; Zeithaml et al., 1993).

Thus, the performance levels citizens desire can constitute objective predictive expectations (i.e., what an individual thinks will happen) and subjective expectations (i.e., what an individual wants to happen). Citizens’ expectations of the standards of public service organizations are diverse even in single-sector provision (Hjortskov, 2017, 2020; James, 2009, 2011; Petrovsky et al., 2017; Song & Meier, 2018; Van Ryzin, 2004, 2006, 2013; Van Ryzin et al., 2004). Considering citizens’ diverse expectations, their sector-based preference for public service organizations can be an element in building these expectations.

Previous studies have shown that the standards of normative expectations are higher than those of predictive expectations (James, 2011). In the same vein, citizens’ expectations of their preferred providers are higher than their expectations of those that they do not prefer. To further investigate how citizens’ sector-based preferences for public service organizations are related to how citizens build their expectations, this study explores whether these preferences of citizens are differently associated with citizens’ satisfaction levels. Citizens can anticipate which service will be most beneficial for them by applying standards of reference for comparison; that is, they choose a particular option by comparing it with others. When evaluating a service, citizens identify something to compare it with, the most typical point of departure (Olsen, 2017). For example, citizens use historical and social reference points to arrive at a relative measure of performance (Favero & Kim, 2021; Webeck & Nicholson-Crotty, 2020). Studies have confirmed that the standards citizens use to assess performance vary based on the types of service organizations and the reference points.

In multisector provision, citizens procure services from public providers and designated nonprofit or for-profit providers contracted by governments to accept vouchers. Thus, citizens’ sector-based preferences can be elicited as the concept of which sector provider citizens believe they want to receive services from in a given set of comparable public, nonprofit, and for-profit sector organizations. It can be further defined as a comparative preference, as, for example, a stronger preference for the public sector over the nonprofit or for-profit sectors or vice versa. This pertains to comparative expectations, what the performance of a brand would be when compared to similar brands (Prakash & Lounsbury, 1984).

In a market where the quality of services is hard to evaluate, citizens hold differing standards for public, nonprofit, and for-profit organizations. Studies show that citizens often have favorable attitudes toward a specific type of ownership. For example, research on public administration has found that citizens tend to have negative attitudes toward the public sector, particularly evident in their perceptions of the U.S. postal service (Marvel, 2015) and Danish hospital services (Hvidman & Andersen, 2016). Conversely, others have identified limited evidence of negative biases in the context of U.S. health services (Meier et al., 2019). Intriguingly, others have documented more positive attitudes toward public or nonprofit organizations than for-profit ones in U.S. social services (Van Slyke & Roch, 2004), Canadian health and education services (Handy et al., 2010), German hospital services (Drevs et al., 2014), and Danish education services (Hvidman & Andersen, 2014). This phenomenon can be explained by the contract failure theory, which argues that citizens have a favorable attitude toward organizations with nonprofit status because they are legally prohibited from distributing profit (Hansmann, 1980). Similarly, pro-public sector preferences tend to be observed in the context of Korean public childcare services (Ministry of Health and Welfare and Korea Institute of Child Care and Education [MHW and KICCE], 2018; Woo & Jun, 2018).

Thus, pro-public sector preferences seem more likely to be observed in health and social services, where information asymmetry in service attributes is pervasive; this situation differs from those of other government services (e.g, postal services, public infrastructure, and household waste recycling). Even though sector type does not confer direct benefits that increase citizen satisfaction, citizens may hold favorable attitudes toward a certain sector. Considering that citizens tend to hold pro-public attitudes in the case of public sector services, the standards citizens who prefer the public sector expect from the public sector tend to be higher than those for the private sector.

Accordingly, it is can be argued that citizens with a preference for public sector organizations are less satisfied than those with a preference for private sector organizations. From this perspective, this study predicts that citizens’ differential preferences, based on their preferred sector as an important reference, lead them to evaluate public service organizations differently. However, whether this sector-based reference appears salient to citizens in the evaluation process has not been sufficiently examined. This study examines how the reference point of citizen preference can differentially relate to citizen satisfaction.

Childcare services involve highly asymmetric information combined with rigorous professional standards, which make it difficult for ordinary, nonprofessional citizens to evaluate whether providers meet their expected levelsof quality. This is similar to the situation in the healthcare and social service domains, where services are highly complex and the costs involved in searching for services and monitoring their quality are high (Andersen & Jakobsen, 2011; Cleveland & Krashinsky, 2009; Harbach, 2015; Kirkpatrick et al., 2001).

Taking this perspective, this study expects that citizens’ different preferences, derived from which sector they indicate as a preferred reference, may lead them to evaluate public service organizations differently. More specifically, in childcare domains, parents value trust in the provider; thus, ownership becomes a meaningful reference point when evaluating providers. Whether a sector-based preference appears salient to citizens in the context of the citizen evaluation process, however, has been understudied. This study poses the following hypothesis:

Hypothesis: In provision where the public sector has long been recognized as a signal of trust, citizens with pro-public sector preferences will be less satisfied with providers than those with nonprofit or for-profit sector preferences.

Public Childcare Context in Korea

In Korea, the government introduced three national childcare support policies for households with children in the 2000s. One is fully funded tuition vouchers, which cater to households with children under 5 years enrolled in childcare centers. The second is a partially-funded tuition voucher scheme for those with 3 to 5 year olds enrolled in kindergartens, and the third is a cash allowance for those who do not enroll their children in childcare centers or kindergartens. All three policy types are demand-driven policy instruments, with voucher schemes and allowances aimed at alleviating the financial burden on parents. The policies, however, have distinctions based on government divisions, original functions, eligibility, and provider types. For example, the Ministry of Education manages kindergartens and offers partially funded tuition for households to educate young children, whereas the Ministry of Health and Wealth (MHW) manages childcare centers and supports families with working mothers (Rhee, 2007). The MHW has conducted surveys every three years since 2004 following the Infant Care Act (ICA, article #9) and evaluates citizen satisfaction with providers.

This study focused on the universal free childcare policy the MHW introduced in 2011. In 2013, this policy expanded eligibility to all households with children regardless of income level (MHW and KICCE, 2018). As Figure 1 shows, the scope of public childcare provision dramatically increased after the policy began to cover tuition for all households. Notably, numerous nonprofit and for-profit centers have been more common in providing this public service provision than government vendors. Citizens redeem vouchers from public (central or local authorities), nonprofit, and for-profit sector organizations in the market.

Figure 1.

Numbers of providers in public, nonprofit, and for-profit sectors.

Child care providers include 9.2% public, 5.42% nonprofit, and 67.5% for-profit sector organizations. According to the ICA (article #10), these providers are classified into seven types: public providers, comprising type (1) national-public (generally known as “public” providers); nonprofit providers (combining types [2] social-welfare cooperatives, [3] partly cooperative organizations or associations, [4] employer-supported providers, and [5] cooperatives); and for-profit providers (combining types [6] private home providers and [7] private home centers) (MHW and KICCE, 2018, p. 58, 2021, p. 61).

The government regulates public, nonprofit, and for-profit providers by subjecting them to the ICA and related rules that stipulate tuition prices (tuition cap), class sizes, and child-to-staff ratios, among other aspects. Providers violating the rules are subject to suspension, closure, or fines (article #24 of ICA) (MHW and KICCE, 2018). Since many observable and quantifiable attributes (e.g., class size) are heavily regulated, providers must compete with each other in terms of less observable attributes (such as trustworthy care). In this regard, it has been noted that parents expect public organizations to deliver more trustworthy services (MHW and KICCE, 2018).

This institutional context shapes public childcare provision, which is afflicted by severe asymmetric information problems. In turn, some parents believe that organizational ownership is a signal of service performance. Parents with a pro-public sector preference were recognized as being more concerned about the trustworthiness of services than others (MHW and KICCE, 2018). This is congruent with the childcare service domain in many countries. This domain is understudied with regard to multisectoral provision because it is one of the few domains in which public, nonprofit, and for-profit organizations coexist (Li et al., 2017; Mauser, 1998; Selden et al., 2006). Considering the dearth of information on public, nonprofit, and for-profit markets for public services, the Korean context offers valuable insights into how citizens formulate their preferences about diverse sectoral organizations that they have equal government-supported purchasing power to choose from.

Methods

Data and Models

The data used in this study are from the 2015 and 2018 Nationwide Survey of Childcare and Early Childhood Education conducted by the Korea Institute of Childcare and Education, a public agency. The survey is a comprehensive, nationwide investigation and is representative of the population of households with children in Korea. The survey was administered through face-to-face interviews using structured questionnaires. The total number of respondents in the surveys was about 5,000, approximately 2,500 in each year. The survey had a response rate of 100%, indicating that it has no sampling bias (MHW and KICCE, 2018). In this study, the specific target population was the subgroup of recipients of fully funded tuition vouchers, which are households with children under five enrolled in childcare centers. Thus, the sample for this study was derived from both the 2015 and 2018 surveys, and the number of valid responses was 3,498.

The data-gathering process employed both multi-stage stratified and cluster sampling procedures. The first dimension of stratification included three policies: fully funded tuition vouchers for childcare centers, partially-funded tuition vouchers for kindergartens, and the cash allowance. The second dimension of stratification included 17 provinces to ensure representativeness of the target population. The sampling method employed was cluster sampling with two-stratification criteria: types of policies (first stage stratification) and provinces (second stage stratification) (MHW and KICCE, 2018). To investigate the relationships between citizens’ sector-based preference and their evaluations of public service organizations, this study used descriptive trend graphs to display how citizen satisfaction differed based on the existence or type of sector-based citizen preferences. Multivariate regressions allowed comparison of citizens’ preferences for the public sector with preferences for nonprofit and for-profit sectors.

Measures

Citizen Satisfaction with Public Service Organizations

Citizen satisfaction was measured as the sum of all the responses, rated by levelof satisfaction with items related to their selected public service organizations, designed to tap diverse dimensions of those organizations. Among the items were those involving staff (including principals and teachers), neighborhood environment, educational facility condition (teaching materials and aids), expense (tuition), health management, food management (meal services), safety and security management, curriculum (including guidance services), and parent participation and education (e.g., training). Survey questions asked respondents to rate their satisfaction with each item on a five-point scale, ranging from 1 (very dissatisfied) to 5 (very satisfied). Through principal component analysis, the first extracted component was standardized based on mean zero and unit standard deviation, where high values indicated a positive evaluation of the provider (Cronbach’s α = 0.955 in the 2015 survey; Cronbach’s α = 0.932 in the 2018 survey).

Citizen Sector-based Preference for Public Service Organizations

Respondents’ sector preference was measured based on a two-part question. The first part asked, “Have you ever been on a waiting list for any provider before you enrolled with the current providers?” Respondents who responded “no” were categorized as the baseline because they had little preference for a certain service organization (no preference). Those who answered “yes” proceeded to the second part of the question: “Which types of providers have you been wait-listed with?” The study reclassified the answers into public, nonprofit, and for-profit sectors according to the seven types of providers listed in article #10 of the ICA.

Control Variables

Reported satisfaction relates to specific features that involve both services and individuals as it is not only a function of actual performance (Oliver, 1980, 1993; Olson, 1979; Van Ryzin, 2004), but depends in part on assessments of the character of the service personnel (Donahue & Miller, 2006). As controls, household attributes such as demographic characteristics and socio-economic status also were included; for instance, a dual-income household was assigned the value of 1 and otherwise was assigned 0. Family size was measured by the number of children, and monthly household income was measured in million Korean won. The total years of school education that both parents had received was another variable.

Next, the attributes of public service organizations were considered. In this context, a set of service costs are regulated at an identical price due to being fully funded by the government. Thus, citizens’ feelings about the costs of the services were incorporated through the survey question, “What do you think of the current monthly tuition costs for the facility?” This aligns with evidence that citizens who perceive the quality of public services positively are more willing to pay higher taxes (Glaser & Hildreth, 1999; Simonsen & Robbins, 2003). The answers were measured on a five-point scale (burdensome, a little burdensome, appropriate, not burdensome, not at all burdensome). These responses were recorded on a scale of −2 to 2 to reflect negative or positive attitudes toward the service. Moreover, the provider’s accreditation status was included, which affects users’ service performance evaluation (Lee & Kim, 2023). Ownership was also included because performance varies by ownership type; parents’ satisfaction was highest for public organizations during the analysis period and lowest for for-profit organizations (MHW and KICCE, 2018, p. 341). In addition, waiting times before enrolling with the current provider were included (Taylor, 1994) with the question, “How long did you wait to enroll your child(ren) in the provider?” Unmatched choices also were recorded by tapping whether or not the provider sector chosen by citizens matched with the sector they preferred (i.e., the sector in which they were wait-listed to enroll).

Next, region and year-fixed effects were included to analyze geographic market conditions and the number of competitors (Johansen & Zhu, 2013). This sought to control for the latent impacts of competition levels and regions’ autonomous status since public–private differences disappear if markets are competitive (Cleveland & Krashinsky, 2009; Hirth, 1999). Market conditions were captured with the question, “Is there a sufficient number of trustworthy childcare facilities near your current residence?” A “yes” answer was assigned a value of 1 and 0 for otherwise. Table 1 presents descriptive statistics for all variables.

Table 1.

Descriptive Statistics.

Variable	Mean	SD	Min	Max
Dependent
Satisfaction with public service organizations	4.028	0.578	1	5
Independent
Public sector-based preference	0.146	0.354	0	1
Nonprofit sector-based preference	0.039	0.195	0	1
For-profit sector-based preference	0.152	0.359	0	1
Control
Household attributes
A dual-income family	0.448	0.497	0	1
Income	413.445	204.103	0	2,350
Size	4.240	0.958	2	9
Education years	23.660	7.057	0	40
Provider attributes
Accreditation (ref. unknown)
Unaccredited	0.542	0.498	0	1
Accredited	0.145	0.352	0	1
Cost	−0.214	1.032	−2	2
Ownership (ref. public)	0.809	0.393	0	1
Nonprofit	0.146	0.353	0	1
For-profit	0.664	0.472	0	1
Queue waiting times	2.265	5.690	0	60
Unmatched	0.754	0.431	0	1
Market attributes
Existence of alternative providers	0.531	0.499	0	1
Location (ref. rural)
Suburban	0.338	0.473	0	1
Urban	0.330	0.470	0	1
Year	0.501	0.500	0	1

Note. N = 3,498.

Findings

Table 2 presents the number of respondents who preferred a particular sector type of provider based on the sector type of provider from which they received services. Among the 3,498 service recipients, 15 percent of parents (512 individuals) had preferences for the public sector, 4% (138) preferred the nonprofit sector, 15% (530) expressed preferences for the for-profit sector, and 66% (2,318 persons) had no particular preferences. The similar percentage of public sector and for-profit sector preferences indicated a stronger predisposition toward the public sector than the nonprofit or for-profit sectors, considering the limited supply capacity of public childcare facilities discussed earlier (Woo & Jun, 2018). The results also showed that 54% of parents with pro-public sector preferences ended up as public recipients, and 66% of those with pro-nonprofit sector preferences ended up as nonprofit recipients. By contrast, 93% of those with for-profit sector preferences became for-profit recipients. This pattern confirmed that a shortfall in the supply of public organizations existed. Thus, unmatched provider choice was included as a control variable.

Table 2.

Numbers of Respondents with Sector-based Preference.

Sector-based preference	Public recipients	Nonprofit recipients	For-profit recipients	Total
Public	279 (54)	34 (7)	199 (39)	512 (15)
Nonprofit	12 (9)	91 (66)	35 (25)	138 (4)
For-profit	17 (3)	21 (4)	492 (93)	530 (15)
None	359 (15)	363 (16)	1,596 (69)	2,318 (66)
Total	667 (19)	509 (15)	2,322 (66)	3,498 (100)

Note. Unit: households, %.

Figure 2 shows how bivariate associations between cost and citizen satisfaction varied according to whether citizens preferred public, nonprofit, or for-profit organizations, or had no preference. . The graphs demonstrate that the direction of the relationships between citizen satisfaction and costs was negative, and this relationship remained for all types of sector preferences. However, the slope of those with preferences for the public and nonprofit sectors is steeper than those with for-profit sector or no preference. This may reflect that citizens with a public sector preference for an organization’s performance more frequently experienced failure to meet their standards. This is because parents may hold different perceptions of nonprofit and for-profit providers, regardless of their performance (Lee & Kim, 2023). Thus, satisfaction with public service provision is conditional upon individual preferences for and expectations of the sector.

Figure 2.

Citizens’ satisfaction with public service organizations.

Table 3 presents the results of multivariate regression analysis of citizen satisfaction, with citizen preference as an explanatory variable. First, in Model (1), the magnitude of the negative associations between citizens’ sector preferences and their satisfaction was stronger for public sector preferences ( $β$ = −0.208, $α$ = 0.001) than preferences for the nonprofit ( $β$ = −0.183, $α$ = 0.001) or for-profit sectors (β = −0.201, $α$ = 0.001). This result supports the hypothesis, confirming that links between citizen sector preference and satisfaction vary according preferred sector type. The results indicate that citizens’ preferences for the public, nonprofit, and for-profit sectors may lead them to set higher standards when evaluating whether their providers perform better than others.

Table 3.

Relationships between Citizen Sector Preference and Citizen Satisfaction.

	Model 1	Model 2	Model 3	Model 4
Variables	All	Public	Nonprofit	For-profit
Constant	4.057*** (0.083)	3.780*** (0.156)	3.812*** (0.198)	3.849*** (0.088)
Sector preference (ref. no preference)
Public sector preference	−0.208*** (0.041)	−0.045 (0.056)	−0.507*** (0.126)	−0.148*** (0.053)
Nonprofit sector preference	−0.183*** (0.060)	−0.216 (0.164)	−0.072 (0.078)	−0.166* (0.098)
For-profit sector preference	−0.201*** (0.051)	−0.141 (0.141)	−0.249* (0.142)	−0.007 (0.033)
Household attributes
A dual-income family	0.013 (0.021)	0.060 (0.048)	−0.024 (0.059)	0.006 (0.026)
Size	0.014 (0.010)	0.007 (0.022)	0.035 (0.027)	0.016 (0.013)
Income	−0.000 (0.000)	0.000** (0.000)	−0.000 (0.000)	−0.000* (0.000)
Education	0.003 (0.002)	−0.001 (0.004)	0.012** (0.005)	0.002 (0.002)
Provider attributes
Cost	−0.066*** (0.010)	−0.049** (0.021)	−0.052** (0.026)	−0.070*** (0.012)
Accreditation (ref. unknown)
Unaccredited	−0.017 (0.022)	0.061 (0.050)	−0.059 (0.056)	−0.026 (0.027)
Accredited	0.126*** (0.032)	0.160 (0.140)	−0.195* (0.107)	0.150*** (0.035)
Ownership (ref. public)
Nonprofit	0.033 (0.037)
For-profit	−0.067** (0.030)
Queue waiting times	−0.000 (0.002)	−0.000 (0.003)	0.005 (0.007)	−0.004 (0.004)
Unmatched	−0.174*** (0.044)
Market attributes
Existence of alternative providers	0.099*** (0.020)	0.094** (0.044)	0.049 (0.055)	0.105*** (0.024)
Location (ref. rural)
Suburban	0.021 (0.024)	0.121** (0.061)	−0.091 (0.079)	0.029 (0.028)
Urban	0.002 (0.026)	−0.005 (0.057)	−0.178** (0.074)	0.053* (0.031)
Year	0.032	0.039	0.226***	0.009
N	(0.027) 3,498	(0.060) 667	(0.077) 509	(0.033) 2,322
R-squared	.045	.054	.085	.050

Standard errors in parentheses.

***

p < .01. **p < .05. *p < .1.

Second, to gain a more nuanced understanding of citizen preferences, Models (2), (3), and (4) explored whether the links between preference and satisfaction varied for subgroups of public, nonprofit, and for-profit recipients, respectively. The results indicate how citizen public sector preferences are related more negatively to satisfaction than preferences for nonprofit or for-profit sectors. In Model (2), the result remained stable, although it was statistically insignificant. However, in Model (3) for the subgroup of nonprofit users, citizens with preferences for the public sector had lower satisfaction ratings ( $β$ = −0.507, α = 0.001) than those with preferences for the nonprofit sector ( $β$ = −0.072), supporting the study’s hypothesis. Similarly, in Model (4), for the subgroup of for-profit users, citizens who preferred public sector organizations ( = −0.148, $α$ = 0.001) were less satisfied than those with preferences for the for-profit sector ( $β$ = −0.007), again supporting the hypothesis.

These findings suggest that the subgroup of citizens with preferences for publicly owned public service organizations might have higher performance standards for providers, and they were less satisfied with their providers’ performance. This is particularly relevant for citizens in the context of asymmetric information because complex goods pose problems for citizens seeking assurance that they will receive goods and services of high quality. Thus, it can explain why citizens’ satisfaction with providers remains low, even though providers perform well in the context of asymmetric information. This in turn provides insights into understanding complex differences in citizen preferences that can foster higher subjective expectation standards.

In addition, examining the control variables tapping household attributes, the relationships between reported satisfaction and whether households had working parents and parents with higher education were statistically insignificant. The provider’s accreditation status was positively related to citizens’ evaluations of services, except for the group of nonprofit recipients. In addition, in all models, markets with trustworthy provider alternatives were positively related to satisfaction.

Discussion and Conclusions

Citizen satisfaction with public service organizations has been used widely as an essential indicator that can yield important insights for the development of public management because it conveys citizens’ opinions about the perceived performance of the organizations from which they receive services. Even so, there remains limited understanding of how citizens arrive at assessments of public service organizations that deliver fully funded services. In contexts where a general pro-public sector preference has long been recognized, these evaluations vary according to citizens’ preferences for the public, nonprofit, or for-profit sector. Against this backdrop, this study aimed to understand citizen sector preferences by examining citizen expectations. Overall, the analysis demonstrates that citizens’ public sector preferences are associated with how they evaluate selected public service organizations in differeing ways, and the strength of the relationship varies according to the sector they prefer.

This study contributes to scholarship on the conceptualizations of citizen sector preferences for providers by exploring broad notions about citizen expectations. As for-profit organizations have proliferated in a relatively short period in the Korean context, concerns have been raised that such organizations undercut the quality of public childcare services. This evidently compels parents to prefer public organizations over for-profit organizations and, in turn, to anchor their judgments on the sector from which they prefer to receive services. The results suggest that citizen satisfaction may be connected to disparate standards, which stem from different preferences led by sectoral perceptions. This is in line with arguments that the standards underlying citizens’ sector preferences for providers are driven by their ideals or reflect normative expectations of public sector performance (James, 2011; Petrovsky et al., 2017). It also aligns with evidence that citizens use a certain reference point as a baseline for their expectations of the services they will receive (Bellé et al., 2023; Olsen, 2017) and that citizens’ perceptions of service providers affect their evaluation (Hvidman, 2019).

Accordingly, compared to traditional public service provision, sector can be used as a reference point that functions as a baseline for citizens’ evaluations, especially in complex public service provision such as collaborative service delivery or cross-sector public service delivery. Considering that multisectoral public service provision has been central to recent reforms and has been accelerated by demand-driven programs in many countries (Lee, 2023; Steuerle et al., 2010). This approach is crucial to understanding how citizens evaluate public service organizations in such contexts.

In this regard, this study also has several practical implications. In the case of low citizen satisfaction with public service organizations, governments need to recognize that citizens’ evaluations are not necessarily strongly associated with actual performance, but with their preference for various sector standards. To the degree this is the case, considering citizen satisfaction as a performance management tool for effective public service performance may be problematic because citizens might evaluate their provider by comparing them with their most desired organization. Such a situation encourages continued inquiry, not only to strengthen the public accountability of public service provision but also to conduct more in-depth analyses grounded in a realistic and sophisticated understanding of how citizens assess public service organizations based on the type of organization (i.e., public, nonprofit or for-profit).

Therefore, public managers should gauge the outcomes of their service provision more accurately by analyzing whether citizens have different standards about the sector of government vendors when giving feedback. This is particularly relevant for those who oversee providers that citizens choose with their vouchers or allowances in a market with asymmetric information problems. These are discussed primarily in service domains, such as elderly care, childcare, and medical care (Hvidman, 2019; Meier et al., 2020). This has been led by a notable rise in demand-driven policy instruments (i.e., vouchers or allowances), which facilitate nonprofit and for-profit organizations playing important roles in the delivery of public services alongside public sector organizations. Previous studies have noted that in most countries, citizens have particular preferences for service provider sector across several service domains (Drevs et al., 2014; Hvidman & Andersen, 2014; Marvel, 2015). Yet, few have investigated whether citizens with specific preferences for the sector of service providers evaluate the providers differently. When governments take further action based on citizen satisfaction, objective indicators are required as complementary performance indicators to measure other aspects of service organizations’ performance, given the likelihood of citizens having strong preferences for a certain type of public service organization.

Despite these implications, this study has several limitations. First, it operationalized citizens’ preferences for the provider sector from which citizens hope to receive services prior to enrolling their children. However, this is specifically relevant for the context in which individuals prefer a provider based on whether or not it is public. In other contexts, there may be other reasons why a parent may be on a waiting list for a different provider. This is particularly relevant to this observational study’s findings. Thus, to generalize the findings, further research is needed to isolate sector-based preferences from other preferences through experimental survey designs and to replicate this study in other contexts.

Second, the empirical analysis was based on secondary observational cross-sectional data from the National Survey of Childcare and Early Childhood Education, including data on parent satisfaction. Admittedly, reliance on self-reported responses could limit the ability to draw conclusions about the relationship between measures of sector-based preferences (here, which provider sector citizens preferred before enrolling their children) and their satisfaction with the chosen providers. Due to possible common method and omitted variable problems, future research should employ experimental design methods and investigate multisectoral public service provision in other countries’ contexts before drawing broader generalizations.

Third, although this study is one of the first to explore the links between citizens’ sector preferences for and their evaluations of public service organizations in the real world, it does not claim that exploration of citizens’ preferences through examining their expectations is the only way to understand citizens’ evaluations of public service organizations. Nevertheless, this study represents a promising path to enhanced understanding of the role of citizens’ attitudes toward public service organizations, including their preferences for the provider’s sector. Especially in public, nonprofit, and for-profit mixed markets for public services, the findings here can serve as a useful departure point.. Future studies should explore whether the sector type of a public service organization matters for the public value that citizens attach to public service delivery.

Footnotes

Data Availability Statement

The dataset for this article is available at: .

Declaration of Conflicting Interests

The author declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

This research was supported by the grant from the Institute of Human Rights and Social Development of Gyeongsang National University (HRSD-2023-A-003).

ORCID iD

Jae Bok Lee

Author Biography

Jae Bok Lee is an associate professor in the Department of Public Administration, Gyeongsang National University, Republic of Korea. Her research interests include public management, equity and public policy, public service delivery, and sectoral differences. Her articles have appeared in such journals as Public Management Review, Public Performance and Management Review, The American Review of Public Administration, Government Information Quarterly, and International Journal of Public Administration.

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