Government versus private ownership of public goods: The role of bargaining frictions

Patrick Schmitz

Journal of Public Economics, 2015, vol. 132, issue C, 23-31

Abstract: The government and a non-governmental organization (NGO) can invest in the provision of a public good. Who should be the owner of the public project? In an incomplete contracting model in which ex post negotiations are without frictions, the party that values the public good most should be the owner, regardless of technological aspects. However, under the plausible assumption that there are bargaining frictions, the optimal ownership structure depends on technological aspects and on the parties' valuations. We show that the differences between incomplete contracting models with public goods and private goods are thus smaller than has previously been thought.

Keywords: Ownership; Incomplete contracts; Investment incentives; Bargaining frictions; Public goods (search for similar items in EconPapers)
JEL-codes: C78 D23 D86 H41 L31 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Working Paper: Government versus private ownership of public goods: The role of bargaining frictions (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:132:y:2015:i:c:p:23-31

DOI: 10.1016/j.jpubeco.2015.09.009

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