Maintenance Costs, Outside Options and Optimal Ownership of a Public Good
AbstractThere has been much attention recently to public-private partnerships and the involvement of NGOs in public good provision. This paper re-examines the effect of ownership of a public good on investment incentives when contracts are incomplete. In the presence of maintenance costs, it is shown that the leading result in the literature by Besley and Ghatak (2001) does not carry through. In some circumstances, project ownership should be allocated to the party that values the project relatively less. The model is applied to the case of environmental conservation and investigates the advantages of Payments for Environmental Services from the point of view of investment incentives in conservation.
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Bibliographic InfoArticle provided by De Gruyter in its journal The B.E. Journal of Economic Analysis & Policy.
Volume (Year): 10 (2010)
Issue (Month): 1 (November)
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Web page: http://www.degruyter.com
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- Maija Halonen, 2010.
"Nature of human capital, technology and ownership of public goods,"
The Centre for Market and Public Organisation
10/243, Department of Economics, University of Bristol, UK.
- Halonen-Akatwijuka, Maija, 2012. "Nature of human capital, technology and ownership of public goods," Journal of Public Economics, Elsevier, vol. 96(11), pages 939-945.
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