When should the government own the physical assets needed to provide public goods?

Patrick Schmitz

Economics Letters, 2024, vol. 241, issue C

Abstract: Consider a government and a non-governmental organization (NGO) who can collaborate to provide a public good using physical assets. Who should be the owner of the assets if the NGO can make non-contractible investments? In the literature it has been argued that whoever has a larger valuation of the public good should be the owner. Yet, this result was derived under the assumption of symmetric information. We study the case in which the NGO gets privately informed about the quality of the public good. It turns out that public ownership becomes more attractive if the probability of a high quality is relatively small, whereas ownership by the NGO becomes more attractive otherwise.

Keywords: Public goods; Property rights; Investment incentives; Asset ownership; Incomplete contracts (search for similar items in EconPapers)
JEL-codes: C78 D23 D86 H41 L31 (search for similar items in EconPapers)
Date: 2024
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Related works:
Working Paper: When Should the Government Own the Physical Assets Needed to Provide Public Goods? (2024)
Working Paper: When Should the Government Own the Physical Assets Needed to Provide Public Goods? (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:241:y:2024:i:c:s0165176524003148

DOI: 10.1016/j.econlet.2024.111830

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