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

Listed author(s):
  • Timothy Besley
  • Maitreesh Ghatak

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.

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File URL: http://sticerd.lse.ac.uk/dps/de/dedps17.pdf
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Paper provided by Suntory and Toyota International Centres for Economics and Related Disciplines, LSE in its series STICERD - Development Economics Papers - From 2008 this series has been superseded by Economic Organisation and Public Policy Discussion Papers with number 17.

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Date of creation: Aug 1999
Handle: RePEc:cep:stidep:17
Contact details of provider: Web page: http://sticerd.lse.ac.uk/_new/publications/default.asp

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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, 02.
  7. 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, 08.
  8. 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, 02.
  9. Lant Pritchett & Martina Viarengo, 2015. "The State, Socialisation, and Private Schooling: When Will Governments Support Alternative Producers?," Journal of Development Studies, Taylor & Francis Journals, vol. 51(7), pages 784-807, July.
  10. Martimort, David & Pouyet, Jerome, 2008. "To build or not to build: Normative and positive theories of public-private partnerships," International Journal of Industrial Organization, Elsevier, vol. 26(2), pages 393-411, March.
  11. Andrews,Matt, 2013. "The Limits of Institutional Reform in Development," Cambridge Books, Cambridge University Press, number 9781107016330, September.
  12. Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
  13. Oliver Hart, 2003. "Incomplete Contracts and Public Ownership: Remarks, and an Application to Public-Private Partnerships," Economic Journal, Royal Economic Society, vol. 113(486), pages 69-76, March.
  14. repec:hrv:faseco:33078971 is not listed on IDEAS
  15. Eric Werker & Faisal Z. Ahmed, 2008. "What Do Nongovernmental Organizations Do?," Journal of Economic Perspectives, American Economic Association, vol. 22(2), pages 73-92, Spring.
  16. Oliver Hart & Andrei Shleifer & Robert W. Vishny, 1997. "The Proper Scope of Government: Theory and an Application to Prisons," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1127-1161.
  17. Clark, John, 1995. "The state, popular participation, and the voluntary sector," World Development, Elsevier, vol. 23(4), pages 593-601, April.
  18. Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817.
  19. Lant Pritchett & Martina Viarengo, 2013. "The State, Socialization, and Private Schooling: When Will Governments Support Alternative Producers?," CID Working Papers 272, Center for International Development at Harvard University.
  20. Marcel Fafchamps & Trudy Owens, 2009. "The Determinants of Funding to Ugandan Nongovernmental Organizations," World Bank Economic Review, World Bank Group, vol. 23(2), pages 295-321, March.
  21. repec:hrv:faseco:30727607 is not listed on IDEAS
  22. Richard Batley & Kevin Sansom, 2011. "Complementary Roles? Ngo–Government Relations For Community‐Based Sanitation In South Asia," Public Administration & Development, Blackwell Publishing, vol. 31(4), pages 282-293, October.
  23. Jean-Etienne de Bettignies & Thomas W. Ross, 2004. "The Economics of Public-Private Partnerships," Canadian Public Policy, University of Toronto Press, vol. 30(2), pages 135-154, June.
  24. Timothy Besley & Maitreesh Ghatak, 2017. "Profit with purpose? A theory of social enterprise," LSE Research Online Documents on Economics 68572, London School of Economics and Political Science, LSE Library.
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