Contracting Out Public Service Provision to Not-For-Profit Firms

John Bennett () and Elisabetta Iossa

The Centre for Market and Public Organisation from The Centre for Market and Public Organisation, University of Bristol, UK

Abstract: In an incomplete contract setting, we analyze the contracting out of public service provision, comparing the performance of for-profit and not-for-profit private firms. Two institutional arrangements are considered, control rights lying either with the firm as under the UK’s Private Finance Initiative (PFI) or the government (as under traditional procurement). We derive the conditions under which provision by not-for-profit firms leads to greater investment and social benefit than provision by for profit firms. The role played by the non-distribution constraint in not-for profit firms and the nature of the investment are emphasized.

Keywords: contracting out; not-for-profit firms; private finance initiative; public-private partnership; incomplete contracts; public service provision (search for similar items in EconPapers)
JEL-codes: H41 L31 L33 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2005-06
New Economics Papers: this item is included in nep-pbe
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Contracting out public service provision to not-for-profit firms (2010)
Working Paper: Contracting Out Public Service Provision to Not-for-Profit Firms (2007)
Working Paper: Contracting Out Public Service Provision to Not-for-Profit Firms (2005)
Working Paper: Contracting Out Public Service Provision to Non-for-profit Firms (2004)
Working Paper: Contracting Out Public Service Provision to Non-for-profit Firms (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:bri:cmpowp:05/124

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