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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 ...

Suggested Citation

  • Mark Pearson & John P. Martin, 2005. "Should We Extend the Role of Private Social Expenditure?," OECD Social, Employment and Migration Working Papers 23, OECD Publishing.
    • Handle: RePEc:oec:elsaab:23-en
    DOI: 10.1787/866271756736
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    References listed on IDEAS

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    1. Blank, Rebecca M, 2000. "When Can Public Policy Makers Rely on Private Markets? The Effective Provision of Social Services," Economic Journal, Royal Economic Society, vol. 110(462), pages 34-49, March.
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    Cited by:

    1. Lindbeck, Assar, 2006. "The Welfare State -- Background, Achievements, Problems," Working Paper Series 662, Research Institute of Industrial Economics.
    2. 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, WZB Berlin Social Science Center.
    3. Nikolaos Grigorakis & Christos Floros & Haritini Tsangari & Evangelos Tsoukatos, 2017. "Combined social and private health insurance versus catastrophic out of pocket payments for private hospital care in Greece," International Journal of Health Economics and Management, Springer, vol. 17(3), pages 261-287, September.
    4. 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, vol. 38(6), pages 946-956, December.
    5. Grigorakis, Nikolaos & Floros, Christos & Tsangari, Haritini & Tsoukatos, Evangelos, 2016. "Out of pocket payments and social health insurance for private hospital care: Evidence from Greece," Health Policy, Elsevier, vol. 120(8), pages 948-959.
    6. 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, vol. 32(3), pages 255-287.

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    More about this item

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

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