Delegation of Contracting in the Private Provision of Public Services

John Bennett () and Elisabetta Iossa

Review of Industrial Organization, 2006, vol. 29, issue 1, 75-92

Abstract: We use an incomplete-contract approach to compare contracting out by a public sector agency with the delegation of contracting out to a public-private partnership (PPP) that is a joint venture between private and public sector agents. The PPP maximizes a linear combination of profit and social benefit. Such delegation may be desirable to curb innovations that reduce the cost of provision but also reduce social benefit. Delegation may be undesirable for innovations that increase social benefit but also raise costs. Our results are explained in terms of the shadow cost of public funds and the negotiating stance of the PPP. Copyright Springer 2006

Keywords: delegation; Private Finance Initiative; public private partnership; public service provision; H11; L33 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (25)

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Working Paper: Delegation of Contracting in the Private Provision of Public Services (2005)
Working Paper: Delegation of Contracting in the Private Provision of Public Services (2005)
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DOI: 10.1007/s11151-006-9110-z

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