Delegation of Contracting in the Private Provision of Public Services

Bennett, John; Iossa, Elisabetta

doi:10.1007/s11151-006-9110-z

Cited by 60 publications

(35 citation statements)

References 15 publications

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“…This issue is of tantamount importance given the estimated size of investments in infrastructures that is forecasted for the next twenty years, and the role that infrastructure funds will thus play. 10 We show that outside finance may improve risk-allocation if it helps alleviating moral hazard and that transaction costs of outside finance are relatively weak.…”

Section: Introductionmentioning

confidence: 81%

The Simple Micro-Economics of Public-Private Partnerships

2008

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We build a unified theoretical framework to analyze the main incentive issues in Public Private Partnerships (PPPs) and the shape of optimal contracts in those contexts. We present a basic model of procurement in a multitask environment in which a risk-averse agent chooses unobservable efforts in cost reduction and quality improvement. We begin by studying the effect on incentives and risk transfer of bundling building and operation into a single contract, allowing for different assumptions on the contractual framework and the quality of the information held by the government. We then extend the basic model in several directions. We consider the factors that affect the optimal allocation of demand risk and their implications for the use of user charges and the choice of contract length. We study the relationship between the operator and its financiers and the impact of private finance. We discuss the trade-off between incentive and flexibility in long-term PPP agreements and the dynamics of PPP contracts, including cost overruns. We also consider how the institutional environment, and specifically the risk of regulatory opportunism, affects contract design and incentives. We conclude with some policy implications on the desirability of PPPs.JEL Classification: D8, L5, H54, H57.

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Section: Introductionmentioning

confidence: 81%

The Simple Micro-Economics of Public-Private Partnerships

2008

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“…In the particular case of prisons, it is very difficult to specify the service requirement in the contract; therefore, the author concludes that services should be carried out under the unbundling regime. In the same vein, Bennett and Iossa (2006) posit that public-private agreements can be desirable in situations in which potential innovations may result in cost-reductions. On the other hand, PPP can lead to malignant effects.…”

Section: Ppp and The Impact Of Property Rightsmentioning

confidence: 99%

“…Notwithstanding, prisons are often used as an example to illustrate theoretical models concerned with the proper scope of government (Bennett & Iossa, 2006;Hart, 2003;Hart, Shleifer, & Vishny, 1997). This type of public service implies several tasks that can be split between public and private authorities and that may differ depending on the kind of prisoners.…”

Section: Introductionmentioning

confidence: 99%

Organizing Prisons through Public-Private Partnerships: a cross-country investigation

Cabral

Saussier

2012

BAR, Braz. Adm. Rev.

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In this paper, we analyze the private participation in prison services in three countries: Brazil, France, and the United States. We highlight striking differences in efficiency between these countries and argue that the explanation for these differences is not restricted to the way property rights are distributed (i.e. public vs. private management). Instead, our analysis suggests that understanding those differences also requires an analysis of the incentives provided by contractual choices as well as decision and revenue rights distribution and institutional constraints. The theoretical literature usually analyzes these blocks separately, and often focuses on property rights distribution. We argue that an efficient arrangement is the result of the way these elements are combined, giving rise to a distinctive governance structure.

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“…Municipalities, however, are typically short in budgets although they need to invest in energy efficiency not only to alleviate financial constraints but also to meet their own as well as national climate change targets (Bennett and Iossa, 2006;dena, 2015;Hartmann et al, 2014;Hendricks, 2014).…”

Section: Introductionmentioning

confidence: 99%

“…In this case third-party contracting, a specific form of public procurement and public-privatecooperation, can be a solution (Bennett and Iossa, 2006;Hartmann et al, 2014;Helle, 1997;Hypko et al, 2010a;. The literature has highlighted the design of contractual arrangements (mode of governance) regarding contract duration and responsibilities as a critical factor to address the complexity in the procurement process, especially with regard to public infrastructure (Hartmann et al, 2014;.…”

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confidence: 99%

Exploring the Role of Servitization to Overcome Barriers for Innovative Energy Efficiency Technologies The Case of Public LED Street Lighting in German Municipalities

2015

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Delegation of Contracting in the Private Provision of Public Services

Cited by 60 publications

References 15 publications

The Simple Micro-Economics of Public-Private Partnerships

The Simple Micro-Economics of Public-Private Partnerships

Organizing Prisons through Public-Private Partnerships: a cross-country investigation

Exploring the Role of Servitization to Overcome Barriers for Innovative Energy Efficiency Technologies The Case of Public LED Street Lighting in German Municipalities

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