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Measuring Public Entrepreneurship Of Quangos

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  • Peter Friedrich
  • Kadri Ukrainski

Abstract

Quangos and public entrepreneurship are closely related. The economic theory of quangos allows us to develop a quango theory and highlight the effects of public entrepreneurship. By considering principal agent relations we show how public entrepreneurship of government and quango influence each other in the framework of vertical competition. Also horizontal competition between a quango and other quangos as well as to private enterprises influences the political entrepreneurship. Reference is made to a duopoly model for a competing quango of version 2. Considering the measurement of success of political entrepreneurship, we find that when it is related to increasing output the output development of the quangos may be used as measure of public entrepreneurship success which is relatively high in case of output maximising management. With other types of management the success turns out lower. If the political success is measured by effects of quango on third parties additional difficulties arise. A model of voters reactions on quango production within a model of public sector shows measurement of public political and public quango entrepreneurship and the budgets which result from these entrepreneurships. As there is no satisfying effect measurement models for quangos, which are empirically verified. Moreover, no social welfare function or a general social indicator function is available. Also social success in the sense of welfare maximisation by benefit-cost measurement through willingness to pay measurement is not applicable. Therefore, the success should be measured at the quango level by application of output oriented criteria. Examples from Germany and Estonia show chances and limits of public entrepreneurship within and through quangos.

Suggested Citation

  • Peter Friedrich & Kadri Ukrainski, 2012. "Measuring Public Entrepreneurship Of Quangos," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 89, Faculty of Economics and Business Administration, University of Tartu (Estonia).
  • Handle: RePEc:mtk:febawb:89
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    References listed on IDEAS

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    1. Schnellenbach, Jan, 2007. "Public entrepreneurship and the economics of reform," Journal of Institutional Economics, Cambridge University Press, vol. 3(02), pages 183-202, August.
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    More about this item

    Keywords

    Quango; public office; public enterprise; vertical competition; horizontal competition; entrepreneurship; public management; success measurement;

    JEL classification:

    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration

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