Abstract. This paper investigates the impact of a ministry's budget size on the choice between auditing a (Niskanen) bureau and employing competitive bidding in the provision of a publicly funded good.The ministry's marginal expected payoff increases fastest with budget size for auctioning as opposed to auditing. However, the ministry is shown to switch from a purely public provision to a competitive provision as the budget size increases even if expected fixed costs favor the audit. The study contributes to the literature by extending the Niskanen framework and by endogenizing the institutional arrangements for the provision of public sector goods.
Abstract. The paper investigates the choice of government to audit or outsource the provision of a public good in the presence of a potential hidden bribe and information asymmetries.An audit mechanism is developed for characterizing the provision of the public good in the public sector given asymmetric information about the cost of production between the bureau (i.e., producer) and the department (funding source).Outsourcing is represented by Nash bargaining between the government department and a monopoly …rm over the price of the public good, including a hidden bribe. The study also relaxes the assumption of a single-tier government underlying the Samuelson rule.The key …ndings are as follows: For small scale economies, bribery is predicted to be aimed at having an outsourcing contract persist even when public sector provision of the public good dominates (based on welfare and unit costs measurements). On the other hand, bribery in large scale economies is predicted to be aimed at motivating outsourcing when the provision of the public good through public sector production is in the public interest. The …ndings also predict that a reduction in the department's corruptibility may result in increased prices as the …rm acts to induce the department to maintain its choice of outsourcing over the public interest for auditing when the …rm's bargaining power is su¢ ciently low and the department's preference towards bribes is relatively high.
In this paper the impact of budget size on a government's choice to centralize or decentralize the budgetary process is investigated using asymmetric information, differing preferences, and endogenous budgetary arrangements. The central government chooses between a budgetary process that excludes the regional board~centralization! and one that includes the board~decentralization! in the determination of program budget levels. It is predicted that the central government will decentralize the budgetary process at low and centralize at high overall budget levels. Switching from decentralization to centralization is predicted to result in a reduction in the budget allocated to the regional board. JEL Classification: H3, C7Processus budgétaire endogène dans le secteur public: faut-il centraliser ou non? Ce mé-moire analyse l'impact de la taille du budget sur le choix par un gouvernement de centraliser ou non son processus budgétaire. On met en évidence l'information asymétrique, les préférences différentes, et les arrangements budgétaires endogènes. Le gouvernement central choisit entre un processus budgétaire qui exclut le conseil régional~centralisation! et un autre qui l'inclut~décentralisation! dans la détermination des niveaux de budgets pour les programmes. On montre que le gouvernement central va décentraliser le processus budgétaire quand les niveaux de budget sont bas, et centraliser à des niveaux de budget plus élevés. Un déplacement de la décentralisation vers la centralisation résulte en une réduction du budget alloué au conseil régional.
This paper investigates the impact of outsourcing on wage settlement in the public sector. The study characterizes the equilibrium wage offered by the public sector union to a government bureau competing against private sectorfirms. It is predicted that the union will offer a concession wage in an attempt to block outsourcing when i~ members' outside employment options are sufficiently unattractive and will offer a non-concession wage otherwise. The study contributes to the literature on outsourcing and wage determination in the public sector. (JEL J~5, J51, HO)
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.