When Can Public Policy Makers Rely on Private Markets? The Effective Provision of Social Services

Rebecca Blank

No 7099, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The privatization of social services is being increasingly discussed. The social services market is characterized by multiple market failures, including informational asymmetries, agency problems, externalities, and distributional concerns. Consumers may care as much or more about quality of services than about price. If quality is readily observable, the government can regulate private providers to assure standards are met. But when standards are difficult to observe or when the recipient is not the agent who makes the decisions, government ownership may be preferable. This paper categorizes the market situations in which the government provision of social services is likely to be most versus least attractive.

JEL-codes: H11 I00 (search for similar items in EconPapers)
Date: 1999-04
New Economics Papers: this item is included in nep-cdm, nep-ind, nep-mic, nep-pbe, nep-pke and nep-pub
Note: PE LS CH
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published as Economic Journal, Vol. 110, no. 462 (March 2000): C34-C49.

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Journal Article: When Can Public Policy Makers Rely on Private Markets? The Effective Provision of Social Services (2000)
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