The Proper Scope of Government: Theory and an Application to Prisons Export

@article{citeulike:1886480, abstract = {When should a government provide a service in-house, and when should it contract out provision? We develop a model in which the provider can invest in improving the quality of service or reducing cost. If contracts are incomplete, the private provider has a stronger incentive to engage in both quality improvement and cost reduction than a government employee has. However, the private contractor's incentive to engage in cost reduction is typically too strong because he ignores the adverse effect on noncontractible quality. The model is applied to understanding the costs and benefits of prison privatization.}, author = {Hart, Oliver and Shleifer, Andrei and Vishny, Robert W.}, citeulike-article-id = {1886480}, citeulike-linkout-0 = {http://dx.doi.org/10.2307/2951268}, citeulike-linkout-1 = {http://www.jstor.org/stable/2951268}, doi = {10.2307/2951268}, journal = {The Quarterly Journal of Economics}, keywords = {economics, publicsector, sizeofgovernment}, number = {4}, pages = {1127--1161}, posted-at = {2007-11-08 23:11:15}, priority = {2}, title = {The Proper Scope of Government: Theory and an Application to Prisons}, url = {http://dx.doi.org/10.2307/2951268}, volume = {112}, year = {1997} }

TY - JOUR ID - citeulike:1886480 L3 - citeulike-article-id:1886480 N2 - When should a government provide a service in-house, and when should it contract out provision? We develop a model in which the provider can invest in improving the quality of service or reducing cost. If contracts are incomplete, the private provider has a stronger incentive to engage in both quality improvement and cost reduction than a government employee has. However, the private contractor's incentive to engage in cost reduction is typically too strong because he ignores the adverse effect on noncontractible quality. The model is applied to understanding the costs and benefits of prison privatization. IS - 4 JF - The Quarterly Journal of Economics EP - 1161 TI - The Proper Scope of Government: Theory and an Application to Prisons VL - 112 SP - 1127 KW - economics KW - publicsector KW - sizeofgovernment AU - Hart, Oliver AU - Shleifer, Andrei AU - Vishny, Robert PY - 1997/// UR - http://dx.doi.org/10.2307/2951268 ER -