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Should We Extend the Role of Private Social Expenditure?

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  • Mark Pearson
  • John P. Martin

Abstract

Some people make great claims about the advantages to be gained from greater reliance on the private sector for the provision of social protection. Many of the claims for great macroeconomic advantages do not stand up to scrutiny. However, there is some reason to hope that private provision might promote microeconomic efficiency and services which are more responsive to consumer preferences than those provided by a single monopoly public sector provider. Drawing on examples from recent OECD country experiences with private health insurance, care for children and the elderly, and private pension provision, three main conclusions can be drawn. First, opening provision to a diversity of providers has often promoted more choice and innovation. Second, however, efficiency gains have often been limited. This is due to a number of inter-related reasons: (a) Individualisation of packages of services is expensive. (b) In order to ensure adequate coverage of the ... Certains font grand cas de l’intérêt qu’il y aurait au plan macroéconomique à faire davantage appel au secteur privé pour assurer la protection sociale. Les arguments présentés dans ce sens ne tiennent souvent pas la route ; cependant, on peut penser que le recours au secteur privé permettrait peut-être une meilleure efficience microéconomique et une réponse plus adaptée aux choix des consommateurs que ce que peut offrir un prestataire public en situation de monopole. A partir de quelques expériences récentes de pays de l’OCDE en matière d’offre privée pour l’assurance maladie, la garde des enfants, les soins aux personnes âgées et la retraite, trois conclusions se dégagent. Premièrement, la diversification des prestataires a souvent permis un plus grand choix et plus d’innovation. Deuxièmement, cependant, les gains d’efficience ont souvent été limités, et ceci pour un certain nombre de raisons difficiles à dissocier : (a) l’individualisation du panier de prestations est ...

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Paper provided by OECD Publishing in its series OECD Social, Employment and Migration Working Papers with number 23.

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Date of creation: 21 Mar 2005
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Handle: RePEc:oec:elsaab:23-en

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  1. Jens Lundsgaard, 2002. "Competition and Efficiency in Publicly Funded Services," OECD Economic Studies, OECD Publishing, OECD Publishing, vol. 2002(2), pages 79-128.
  2. Willem Adema, 2001. "Net Social Expenditure: 2nd Edition," OECD Labour Market and Social Policy Occasional Papers, OECD Publishing 52, OECD Publishing.
  3. Andrea Bassanini & Stefano Scarpetta, 2001. "The Driving Forces of Economic Growth: Panel Data Evidence for the OECD Countries," Post-Print, HAL halshs-00168383, HAL.
  4. Francesca Colombo, 2001. "Towards More Choice in Social Protection?: Individual Choice of Insurer in Basic Mandatory Health Insurance in Switzerland," OECD Labour Market and Social Policy Occasional Papers, OECD Publishing 53, OECD Publishing.
  5. Greß, Stefan & Okma, Kieke G. H. & Wasem, Jürgen, 2002. "Private health insurance in social health insurance countries: Market outcomes and policy implications," Wirtschaftswissenschaftliche Diskussionspapiere 01/2002, Ernst Moritz Arndt University of Greifswald, Faculty of Law and Economics.
  6. Thai-Thanh Dang & Pablo Antolín & Howard Oxley, 2001. "Fiscal Implications of Ageing: Projections of Age-Related Spending," OECD Economics Department Working Papers 305, OECD Publishing.
  7. David W. Kalisch & Tetsuya Aman & Libbie A. Buchele, 1998. "Social and Health Policies in OECD Countries: A Survey of Current Programmes and Recent Developments," OECD Labour Market and Social Policy Occasional Papers, OECD Publishing 33, OECD Publishing.
  8. Jens Lundsgaard, 2002. "Competition and Efficiency in Publicly Funded Services," OECD Economics Department Working Papers 331, OECD Publishing.
  9. Blank, Rebecca M, 2000. "When Can Public Policy Makers Rely on Private Markets? The Effective Provision of Social Services," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 110(462), pages C34-49, March.
  10. Willem Adema & Marcel Einerhand, 1998. "The Growing Role of Private Social Benefits," OECD Labour Market and Social Policy Occasional Papers, OECD Publishing 32, OECD Publishing.
  11. Pablo Antolín & Alain de Serres & Christine de la Maisonneuve, 2004. "Long-Term Budgetary Implications of Tax-Favoured Retirement Plans," OECD Economics Department Working Papers 393, OECD Publishing.
  12. Jane Hall & Richard De Abreu Lourenco & Rosalie Viney, 1999. "Carrots and sticks-the fall and fall of private health insurance in Australia," Health Economics, John Wiley & Sons, Ltd., vol. 8(8), pages 653-660.
  13. Roman Arjona & Maxime Ladaique & Mark Pearson, 2001. "Growth, Inequality and Social Protection," OECD Labour Market and Social Policy Occasional Papers, OECD Publishing 51, OECD Publishing.
  14. A. B. Atkinson, 1999. "The Economic Consequences of Rolling Back the Welfare State," MIT Press Books, The MIT Press, The MIT Press, edition 1, volume 1, number 0262011719, December.
  15. Michael Leahy & Sebastian Schich & Gert Wehinger & Florian Pelgrin & Thorsteinn Thorgeirsson, 2001. "Contributions of Financial Systems to Growth in OECD Countries," OECD Economics Department Working Papers 280, OECD Publishing.
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Cited by:
  1. Schmid, Günther, 2006. "Sharing risk: on social risk management and the governance of labour market transitions," Discussion Papers, Research Unit: Labor Market Policy and Employment SP I 2006-101, Social Science Research Center Berlin (WZB).
  2. Beraldo, Sergio & Montolio, Daniel & Turati, Gilberto, 2009. "Healthy, educated and wealthy: A primer on the impact of public and private welfare expenditures on economic growth," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, Elsevier, vol. 38(6), pages 946-956, December.
  3. Lindbeck, Assar, 2006. "The Welfare State -- Background, Achievements, Problems," Working Paper Series, Research Institute of Industrial Economics 662, Research Institute of Industrial Economics.
  4. Martin Heipertz & Melanie Ward-Warmedinger, 2008. "Economic and Social Models in Europe and the Importance of Reform," Financial Theory and Practice, Institute of Public Finance, Institute of Public Finance, vol. 32(3), pages 255-287.

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