Delegation of Contracting in the Private Provision of Public Services

Elisabetta Iossa

The Centre for Market and Public Organisation from The Centre for Market and Public Organisation, University of Bristol, UK

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 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.

Keywords: delegation; Private Finance Initiative; Public Private Partnership; Public Service Provision (search for similar items in EconPapers)
JEL-codes: H11 L33 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2005-04
New Economics Papers: this item is included in nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Delegation of Contracting in the Private Provision of Public Services (2006)
Working Paper: Delegation of Contracting in the Private Provision of Public Services (2005)
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