Privatization, Information and Incentives / David E. M. Sappington, Joseph E. Stiglitz.

Format:

Book

Author/Creator:

Sappington, David E. M.

Contributor:

National Bureau of Economic Research.

Stiglitz, Joseph E.

Series:

Working Paper Series (National Bureau of Economic Research) no. w2196.

NBER working paper series no. w2196

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1987.

Summary:

In this paper, the choice between public and private provision of goods and services is considered. In practice, both modes of operation involve significant delegation of authority, and thus appear quite similar in some respects. The argument here is that the main difference between the two mod- concerns the transactions cats faced by the government when attempting to intervene in the delegated production activities. Such intervention is generally less costly under public ownership than under private ownership. The greater ease of intervention under public ownership can have its advantages; but the fact that a promise not to intervene is more credible under private production can also have beneficial incentive effects, The Fundamental Privatization Theorem (analogous to The Fundamental Theorem of Welfare Economics) is presented, providing conditions under which government production cannot improve upon private production. The restrictiveness of these conditions is evaluated.

Notes:

Print version record

March 1987.