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The other side of the coin: The privatization phenomenon and realization of public welfare in a Single European Health Care System? A sketch from the perspective of the economic theory of law


  • Janoska, Wilfried


The commonwealth cannot be equated with the state nor can the common good of society be sustained by government action alone. Rather, the activities of all members of society are crucial importance. Such private sector activities also define the development of national healthcare markets in the convergence to a single health care market in the EU. The desired result of securing reliable and socially equitable provision of the people was associated with considerable costs for responsible administrative units. Especially in times of weak economic activity, this led to a significant burden on public budgets. Thus, the disadvantages of state activities typically form the starting point for privatizations. The contribution is about the consequences of privatization in the area of public services, particularly public hospitals. It is based on the methods of economic theory of law and introduces the importance of the reservations of the “desired” and “feasible” towards the creation of a mandate to the EU in the health sector. Question is whether and to what extent the state is losing its influence on public health structures, and what consequences it can have, if the services are not permanently guaranteed by any other means. Such a transformation process raises the question whether the reversal of privatization, i.e. of a hospital, does fall within the remit of the EU. In the alternative, whether an obligation of the EU arises, to create a (buffering compensatory) framework for such community projects. The parallels are obvious to the financial sector.

Suggested Citation

  • Janoska, Wilfried, 2012. "The other side of the coin: The privatization phenomenon and realization of public welfare in a Single European Health Care System? A sketch from the perspective of the economic theory of law," MPRA Paper 40364, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:40364

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    References listed on IDEAS

    1. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-795, December.
    2. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    3. Lorenz, Hans-Walter, 2009. "Complexity in Economic Theory and Real Economic Life," European Review, Cambridge University Press, vol. 17(02), pages 403-421, May.
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    More about this item


    privatization/socialization; EU health care mandate; law and economics;

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • K00 - Law and Economics - - General - - - General (including Data Sources and Description)
    • P2 - Economic Systems - - Socialist Systems and Transition Economies
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • P14 - Economic Systems - - Capitalist Systems - - - Property Rights
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

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