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Incentives, choice and accountability in the provision of public services

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Author Info
Tim Besley () (Institute for Fiscal Studies and Monetary Policy Committee, Bank of England and London School of Economics)
Maitreesh Ghatak

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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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Publisher 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
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Handle: RePEc:ifs:ifsewp:03/08

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416. [Downloadable!] (restricted)
  2. 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. [Downloadable!] (restricted)
  3. 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. [Downloadable!] (restricted)
    Other versions:
  4. Michael Raith, 2003. "Competition, Risk, and Managerial Incentives," American Economic Review, American Economic Association, vol. 93(4), pages 1425-1436, September. [Downloadable!]
  5. Glennerster, Howard, 1991. "Quasi-markets for Education?," Economic Journal, Royal Economic Society, vol. 101(408), pages 1268-76, September. [Downloadable!] (restricted)
  6. Francois, Patrick, 2000. "'Public service motivation' as an argument for government provision," Journal of Public Economics, Elsevier, vol. 78(3), pages 275-299, November. [Downloadable!] (restricted)
  7. Nickell, Stephen J, 1996. "Competition and Corporate Performance," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 724-46, August. [Downloadable!] (restricted)
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  8. Helen F. Ladd, 2002. "School Vouchers: A Critical View," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 3-24, Fall. [Downloadable!] (restricted)
  9. Steve Gibbons & Stephen Machin, 2001. "Valuing Primary Schools," CEE Discussion Papers 0015, Centre for the Economics of Education, LSE. [Downloadable!]
  10. Holmstrom, Bengt, 1999. "Managerial Incentive Problems: A Dynamic Perspective," Review of Economic Studies, Blackwell Publishing, vol. 66(1), pages 169-82, January. [Downloadable!] (restricted)
  11. Bengt Holmstrom, 1999. "Managerial Incentive Problems: A Dynamic Perspective," NBER Working Papers 6875, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  12. Dennis Epple & Richard Romano, 2002. "Educational Vouchers and Cream Skimming," NBER Working Papers 9354, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  13. Schmidt, Klaus M, 1997. "Managerial Incentives and Product Market Competition," Review of Economic Studies, Blackwell Publishing, vol. 64(2), pages 191-213, April. [Downloadable!] (restricted)
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  14. Le Grand, Julian, 1991. "Quasi-markets and Social Policy," Economic Journal, Royal Economic Society, vol. 101(408), pages 1256-67, September. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Laurent Franckx & Isabelle Brose, 2004. "A theoretical framework for incentives in the public sector," Economics Bulletin, Economics Bulletin, vol. 10(2), pages 1-8. [Downloadable!]
  2. Steve Machin & Anna Vignoles, 2005. "Education Policy in the UK," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 3(4), pages 64-74, 01. [Downloadable!]
  3. Torberg Falch & Marte Rønning, 2005. "The Influence of Student Achievement on Teacher Turnover," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  4. Jana Vyrastekova & Sander Onderstal & Pierre Koning, 2006. "Team incentives in public organisations; an experimental study," CPB Discussion Papers 60, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  5. Alex Marsh, 2004. "The Inexorable Rise Of The Rational Consumer? The Blair Government And The Reshaping Of Social Housing," European Journal of Housing Policy, Taylor and Francis Journals, vol. 4(2), pages 185-207, August. [Downloadable!] (restricted)
  6. Simon Burgess & Carol Propper & Marisa Ratto & Emma Tominey, 2004. "Incentives in the Public Sector: Evidence from a Government Agency," The Centre for Market and Public Organisation 04/103, Department of Economics, University of Bristol, UK. [Downloadable!]
  7. Carol Propper & Matt Sutton & Carolyn Whitnall & Frank Windmeijer, 2008. "Incentives and Targets in Hospital Care: Evidence from a Natural Experiment," The Centre for Market and Public Organisation 08/205, Department of Economics, University of Bristol, UK. [Downloadable!]
  8. Paul H. Jensen & Robin E. Stonecash, 2004. "The Efficiency of Public Sector Outsourcing Contracts: A Literature Review," Melbourne Institute Working Paper Series wp2004n29, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. [Downloadable!]
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