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Public-Private Partnership for the Provision of Public Goods: Theory and an Application to NGOs

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  • Timothy Besley
  • Maitreesh Ghatak

Abstract

This paper analyzes the role of public and private responsibility in the provision of public goods. We emphasise that a typical public good will require many different inputs which raises the possibility of partnerships to exploit comparative advantages of different parties. But hold-up problems due to contractual incompleteness in specifying tasks discourage separation of ownership and management. We extend our analysis to examine the role of project design or 'ideology' as a separate non-contractible input, and the possibility of crowding out in the form of a less caring government being elected , because of the presence of private providers. The main application developed here is to NGOs in developing countries which, in the last two decades, have been increasingly involved in various capacities in the provisions of a wide range of public goods and services.

Suggested Citation

  • Timothy Besley & Maitreesh Ghatak, 1999. "Public-Private Partnership for the Provision of Public Goods: Theory and an Application to NGOs," STICERD - Development Economics Papers - From 2008 this series has been superseded by Economic Organisation and Public Policy Discussion Papers 17, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  • Handle: RePEc:cep:stidep:17
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    File URL: http://sticerd.lse.ac.uk/dps/de/dedps17.pdf
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    References listed on IDEAS

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    1. Susan Rose-Ackerman, 1996. "Altruism, Nonprofits, and Economic Theory," Journal of Economic Literature, American Economic Association, vol. 34(2), pages 701-728, June.
    2. Timothy Besley & Torsten Persson, 2011. "Pillars of Prosperity: The Political Economics of Development Clusters," Economics Books, Princeton University Press, edition 1, number 9624.
    3. Timothy Besley & Maitreesh Ghatak, 2001. "Government Versus Private Ownership of Public Goods," The Quarterly Journal of Economics, Oxford University Press, vol. 116(4), pages 1343-1372.
    4. Glaeser, Edward L. & Shleifer, Andrei, 2001. "Not-for-profit entrepreneurs," Journal of Public Economics, Elsevier, vol. 81(1), pages 99-115, July.
    5. Timothy Besley & Maitreesh Ghatak, 2005. "Competition and Incentives with Motivated Agents," American Economic Review, American Economic Association, vol. 95(3), pages 616-636, June.
    6. Jennifer M. Brinkerhoff & Derick W. Brinkerhoff & Derick W. Brinkerhoff & Jennifer M. Brinkerhoff, 2011. "Public–private partnerships: Perspectives on purposes, publicness, and good governance," Public Administration & Development, Blackwell Publishing, vol. 31(1), pages 2-14, February.
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    8. Timothy Besley & Torsten Persson, 2014. "The Causes and Consequences of Development Clusters: State Capacity, Peace, and Income," Annual Review of Economics, Annual Reviews, vol. 6(1), pages 927-949, August.
    9. David Martimort & Flavio Menezes & Myrna Wooders & ELISABETTA IOSSA & DAVID MARTIMORT, 2015. "The Simple Microeconomics of Public-Private Partnerships," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 17(1), pages 4-48, February.
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    Citations

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    Cited by:

    1. Brishti Guha & Prabal Roy Chowdhury, 2012. "Borrower Targeting under Micro-finance Competition with Motivated MFIs," Working Papers 05-2012, Singapore Management University, School of Economics.
    2. Krautheim, Sebastian & Verdier, Thierry, 2016. "Offshoring with endogenous NGO activism," Journal of International Economics, Elsevier, vol. 101(C), pages 22-41.
    3. Abigail Barr & Marcel Fafchamps & Trudy Owens, 2004. "The Resources and Governance of Non-Governmental Organizations in Uganda," CSAE Working Paper Series 2004-06, Centre for the Study of African Economies, University of Oxford.
    4. Roy, Jaideep & Chowdhury, Prabal Roy, 2009. "Public-private partnerships in micro-finance: Should NGO involvement be restricted?," Journal of Development Economics, Elsevier, vol. 90(2), pages 200-208, November.

    More about this item

    Keywords

    Public goods; non-governmental organizations; incomplete contracting; partnerships.;

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • H4 - Public Economics - - Publicly Provided Goods

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