Identifying Key Causal Factors of “Outsourcing Failure” in Government Procurement of Public Service Based on Interval Type‐2 Fuzzy DEMATEL‐Prospect Theory

ABSTRACT Accurately identifying the key causal factors of “outsourcing failure” in government procurement of public service (GPPS) is the focus when constructing its corrective mechanism. The research process and contributions of this paper unfold in two parts: First, based on the structure‐process‐outcome (SPO) model, from the three dimensions of structure, process and outcome, constructing a library of factors causing “outsourcing failure” in GPPS. Then aiming at the ambiguity, uncertainty, and risk preference of decision makers in the decision‐making process, this study proposes a method to identify the key causal factors of “outsourcing failure” in GPPS based on interval type‐2 fuzzy decision‐making trial and evaluation laboratory (DEMATEL)‐prospect theory. We take government procurement of home‐based care services in Jiangsu Province as an example. The results show that nine key causal factors were identified. Further, targeted correction suggestions are proposed to provide strong support and reference for improving the effect of GPPS outsourcing.