Arbeitspapier
Will Privatization Reduce Costs?
I develop a model of public sector contracting based on the multitask framework by Holmström and Milgrom (1991). In this model, an agent can put effort into increasing the quality of a service or reducing costs. Being residual claimants, private owners have stronger incentives to cut costs than public employees. However, if quality cannot be perfectly measured, providing a private firm with incentives to improve quality forces the owner of the firm to bear risk. As a result, private firms will always be cheaper for low levels of quality but might be more expensive for high levels of quality. Extending the model to allow for differences in task attractiveness, I find that public firms shun unattractive tasks, whereas private firms undertake them if incentives are strong enough.
- Sprache
-
Englisch
- Erschienen in
-
Series: IFN Working Paper ; No. 736
- Klassifikation
-
Wirtschaft
Structure, Scope, and Performance of Government
Publicly Provided Goods: General
Public Enterprises; Public-Private Enterprises
Comparison of Public and Private Enterprises and Nonprofit Institutions; Privatization; Contracting Out
- Thema
-
Privatization
Public Sector Contracting
Incomplete Contracts
Contracting Out
Öffentliche Dienstleistung
Wirtschaftliche Effizienz
Privatisierung
Outsourcing
Kostenanalyse
Theorie
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Lindqvist, Erik
- Ereignis
-
Veröffentlichung
- (wer)
-
Research Institute of Industrial Economics (IFN)
- (wo)
-
Stockholm
- (wann)
-
2008
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:42 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Lindqvist, Erik
- Research Institute of Industrial Economics (IFN)
Entstanden
- 2008
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