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Incentives, choice and accountability in the provision of public services

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  • Tim Besley

    ()
    (Institute for Fiscal Studies and London School of Economics)

  • Maitreesh Ghatak

Abstract

This paper discusses a theoretical framework to study the issues of competition and incentives without relying on the standard profit-oriented “market” model in the context of the debates about public service reform in the UK. It uses the idea that the production of public services coheres around a mission, and discusses how decentralized service provision can raise productivity by matching motivated workers to their preferred missions. Our focus on competition and incentives cuts across traditional debates about public versus private ownership and allows for the possibility of involving private non-profits. We also address concerns about the consequences of allowing more flexibility in mission design and competition on inequality.

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File URL: http://www.ifs.org.uk/wps/wp0308.pdf
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Bibliographic Info

Paper provided by Institute for Fiscal Studies in its series IFS Working Papers with number W03/08.

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Length: 30 pp
Date of creation: May 2003
Date of revision:
Handle: RePEc:ifs:ifsewp:03/08

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  1. Timothy Besley & Maitreesh Ghatak, 2005. "Competition and Incentives with Motivated Agents," American Economic Review, American Economic Association, vol. 95(3), pages 616-636, June.
  2. Steve Gibbons & Stephen Machin, 2001. "Valuing Primary Schools," CEE Discussion Papers 0015, Centre for the Economics of Education, LSE.
  3. Le Grand, Julian, 1991. "Quasi-markets and Social Policy," Economic Journal, Royal Economic Society, vol. 101(408), pages 1256-67, September.
  4. Timothy Besley & Maitreesh Ghatak, 2001. "Government Versus Private Ownership Of Public Goods," The Quarterly Journal of Economics, MIT Press, vol. 116(4), pages 1343-1372, November.
  5. Schmidt, Klaus M, 1997. "Managerial Incentives and Product Market Competition," Review of Economic Studies, Wiley Blackwell, vol. 64(2), pages 191-213, April.
  6. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
  7. Holmstrom, Bengt, 1999. "Managerial Incentive Problems: A Dynamic Perspective," Review of Economic Studies, Wiley Blackwell, vol. 66(1), pages 169-82, January.
  8. Avinash Dixit, 2002. "# Incentives and Organizations in the Public Sector: An Interpretative Review," Journal of Human Resources, University of Wisconsin Press, vol. 37(4), pages 696-727.
  9. Michael Raith, 2003. "Competition, Risk, and Managerial Incentives," American Economic Review, American Economic Association, vol. 93(4), pages 1425-1436, September.
  10. Dennis Epple & Richard Romano, 2008. "Educational Vouchers And Cream Skimming," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(4), pages 1395-1435, November.
  11. Francois, Patrick, 2000. "'Public service motivation' as an argument for government provision," Journal of Public Economics, Elsevier, vol. 78(3), pages 275-299, November.
  12. Nickell, S.J., 1993. "Competition and Crporate Performance," Economics Series Working Papers 99155, University of Oxford, Department of Economics.
  13. Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817.
  14. Helen F. Ladd, 2002. "School Vouchers: A Critical View," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 3-24, Fall.
  15. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416.
  16. Glennerster, Howard, 1991. "Quasi-markets for Education?," Economic Journal, Royal Economic Society, vol. 101(408), pages 1268-76, September.
  17. Caroline M. Hoxby, 2002. "School Choice and School Productivity (or Could School Choice be a Tide that Lifts All Boats?)," NBER Working Papers 8873, National Bureau of Economic Research, Inc.
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