In this article, we examine patterns of privatization in the Illinois
child welfare system using data from state payment records and a surve
y of organizational providers. We describe the state contract system a
nd show which providers are active in it and how important they are to
the state agency involved. We hypothesize (1) that market forces will
favor those providers that match most closely the needs of the state
agency for specific expertise and (2) that power and leverage will ope
rate to favor those who can bring the most resources to bear on contra
ct negotiations. Multiple regression analysis shows support for both h
ypotheses.