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While government contracting is pervasive, there is limited understanding of the magnitude of resulting effi ciency gains, and particularly the degree to which incomplete contracting inhibits their pass-through to either governments or constituents. I examine these questions by looking to Medicaid contracting in New York, where the state pays private insurers to coordinate beneficiary care and reimburse providers, in lieu of doing so directly. These contracts exhibit incompleteness, as private insurers end up responsible for some but not all medical services, with the rest remaining under public provision. For causally identifying the effects of incomplete contracting, I leverage a change in contract completeness over the sample period, through the integration of previously excluded drug services. While I find evidence of effi ciency gains, I find that incomplete contracting reduces their pass-through to governments, by …