State Versus Private Ownership

Andrei Shleifer

No 6665, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Private ownership should generally be preferred to public ownership when the incentives to innovate and to contain costs must be strong. In essence, this is the case for capitalism over socialism, explaining the dynamic vitality' of free enterprise. The great economists of the 1930s and 1940s failed to see the dangers of socialism in part because they focused on the role of prices under socialism and capitalism and ignored the enormous importance of ownership as the source of capitalist incentives to innovate. Moreover, many of the concerns that private firms fail to address social goals' can be addressed through government contacting and regulation without resort to government ownership. The case for private provision only becomes stronger when competition between suppliers, reputational mechanisms, and the possibility of provision by private not-for-profit firms, as well as political patronage and corruption, are brought into play.

JEL-codes: H11 P30 (search for similar items in EconPapers)
Date: 1998-07
New Economics Papers: this item is included in nep-cdm, nep-pub and nep-tid
Note: PE CF
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (695)

Published as Journal of Economic Perspectives, Vol. 12, no. 4 (1998): 133-150.

Downloads: (external link)
http://www.nber.org/papers/w6665.pdf (application/pdf)

Related works:
Journal Article: State versus Private Ownership (1998)
Working Paper: State Versus Private Ownership (1998)
Working Paper: State versus Private Ownership (1998)
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:nbr:nberwo:6665

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w6665

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().