Pricing, cost recovery, and production efficiency in transport : a critique
The purpose of this paper is to assess the efficacy of optimal pricing formulas for pricing and cost recovery and to develop a general framework within which to analyze the performance of public transport. Five sources of inefficiency in public transport are discussed: (a) the goals of the enterprise or the regulation of its operations; (b) the structure of the output market; (c) the control mechanism between government and the enterprise; (c) the managerial incentive structure; and (d) the conditions of employment. Even when public enterprises are bent on maximizing consumer welfare, costs are not necessarily minimized. Lack of competition may also exacerbate the problem of asymmetric information between owners and managers. Owners of public firms are unlikely to exert pressure on public enterprises to operate efficiently. And public firms may be protected from insolvency by"soft"budget constraints.
|Date of creation:||30 Jun 1990|
|Date of revision:|
|Contact details of provider:|| Postal: 1818 H Street, N.W., Washington, DC 20433|
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kim, Moshe & Spiegel, Menahem, 1987. "The effects of lump-sum subsidies on the structure of production and productivity in regulated industries," Journal of Public Economics, Elsevier, vol. 34(1), pages 105-119, October.
- B. Caillaud & R. Guesnerie & P. Rey & J. Tirole, 1988.
"Government Intervention in Production and Incentives Theory: A Review of Recent Contributions,"
RAND Journal of Economics,
The RAND Corporation, vol. 19(1), pages 1-26, Spring.
- Bernard Caillaud & Patrick Rey & Roger Guesnerie & Jean Tirole, 1987. "Government Intervention in Production and Incentives Theory: A Review of Recent Contributions," Working papers 472, Massachusetts Institute of Technology (MIT), Department of Economics.
- Jean Tirole & Jean-Jaques Laffont, 1985.
"Using Cost Observation to Regulate Firms,"
368, Massachusetts Institute of Technology (MIT), Department of Economics.
- Lindauer, David L., 1988. "Government pay and employment policies and government performance in developing economies," Policy Research Working Paper Series 42, The World Bank.
- Yellen, Janet L, 1984. "Efficiency Wage Models of Unemployment," American Economic Review, American Economic Association, vol. 74(2), pages 200-205, May.
- Baumol, William J & Bradford, David F, 1970. "Optimal Departures from Marginal Cost Pricing," American Economic Review, American Economic Association, vol. 60(3), pages 265-83, June.
- Bos, Dieter, 1985. "Public sector pricing," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 1, chapter 3, pages 129-211 Elsevier.
- Heggie, Ian G. & Quick, Michael, 1990. "A framework for analyzing financial performance of the transport sector," Policy Research Working Paper Series 356, The World Bank.
- Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
- Bos, Dieter & Peters, Wolfgang, 1988. "Privatization, internal control, and internal regulation," Journal of Public Economics, Elsevier, vol. 36(2), pages 231-258, July.
- Nellis, John R., 1988. "Contract plans and public enterprise performance," Policy Research Working Paper Series 118, The World Bank.
- Galenson, Alice, 1989. "Labor redundancy in the transport sector," Policy Research Working Paper Series 158, The World Bank.
- John Vickers & George Yarrow, 1988. "Privatization: An Economic Analysis," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262720116, December.
- De Alessi, Louis, 1974. "Managerial Tenure under Private and Government Ownership in the Electric Power Industry," Journal of Political Economy, University of Chicago Press, vol. 82(3), pages 645-53, May/June.
- Rees, Ray, 1984. "The Public Enterprise Game," Economic Journal, Royal Economic Society, vol. 94(376a), pages 109-23, Supplemen.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:445. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi)
If references are entirely missing, you can add them using this form.