Arm's Length Provision of Public Services
Research output: Working paper › Research
Documents
- 2007-12
Final published version, 494 KB, PDF document
We analyze the economic consequences of strategic delegation of the right to decide between public or private provision of governmental service and/or the authority to negotiate and renegotiate with the chosen service provider. Our model encompass both bureaucratic delegation from a government to a privatization agency and electoral delegation from voters to a government. We identify two powerfull effects of delegation when contracts are incomplete: The incentive effect increases the incentive part of service providers' remuneration and we show that strategic delegation may substitute formal incentive contracts. The bargaining effect improves the bargaining position vis a vis a private firm with market power and leads to a lower price for the service
Original language | English |
---|---|
Publisher | Centre for Industrial Economics, Department of Economics, University of Copenhagen |
Number of pages | 44 |
Publication status | Published - 2007 |
- Faculty of Social Sciences - outsourcing, strategic delegation, incentives, incomplete contracting, market power
Research areas
Number of downloads are based on statistics from Google Scholar and www.ku.dk
No data available
ID: 1632730