Partial Privatization and Incomplete Contracts: The Proper Scope of Government Reconsidered

Patrick Schmitz

FinanzArchiv: Public Finance Analysis, 2001, vol. 57, issue 4, 394-411

Abstract: In this paper it is argued that privatization is not the only alternative to public ownership. Adopting the incomplete contract approach, it is shown that partial privatization may well be the optimal ownership structure. While in the standard incomplete contract model joint ownership is usually suboptimal, it is shown here that joint ownership in the form of partial privatization can be optimal since it mitigates the disadvantages of public ownership (no incentives to improve quality if the manager invests or too strong incentives if the government invests) and of rivatization (too strong incentives for the manager to reduce costs).

JEL-codes: D23 H82 L33 (search for similar items in EconPapers)
Date: 2001
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (47)

Downloads: (external link)
https://www.mohrsiebeck.com/en/article/partial-pri ... 16280015221012904869
Fulltext access is included for subscribers to the printed version.

Related works:
Working Paper: Partial Privatization and Incomplete Contracts: The Proper Scope of Government Reconsidered (2000)
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:mhr:finarc:urn:sici:0015-2218(200108)57:4_394:ppaict_2.0.tx_2-q

Ordering information: This journal article can be ordered from
Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany

Access Statistics for this article

FinanzArchiv: Public Finance Analysis is currently edited by Alfons Weichenrieder, Ronnie Schöb and Jean-François Tremblay

More articles in FinanzArchiv: Public Finance Analysis from Mohr Siebeck, Tübingen
Bibliographic data for series maintained by Thomas Wolpert ().