The Choice Between the In-house Provision and the Competitive Out-house Provision of Public Services

Eero Lehto

No 216, Working Papers from Työn ja talouden tutkimus LABORE, The Labour Institute for Economic Research LABORE

Abstract: This study focuses on the production welfare services which are purchased by the government. We consider whether the delivery of the service should be public or private. The social impact of the service is determined by the satisfaction of unforeseen individual needs. Assuming that the information about these needs is ex post observed only by the producer of the service favours public production. Auctioning the right-to-produce contract, however, selects the most cost-effient private supplier. Whether private production is optimal resolves from the trade-off between cost effiency and a failure in meeting individual needs. We also analyse investments in monitoring.

JEL-codes: L33 L80 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2006-01-01
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://labore.fi/wp-content/uploads/2006/01/Tyopapereita-216.pdf First version, 2006 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pst:wpaper:216

Access Statistics for this paper

More papers in Working Papers from Työn ja talouden tutkimus LABORE, The Labour Institute for Economic Research LABORE Contact information at EDIRC.
Bibliographic data for series maintained by Jaana Toivainen ().