How Responsive are Chinese Exports to Exchange Rate Changes? Evidence from Firm-level Data

This article examines the impact of exchange rate changes on Chinese firms’ decisions on export market entry and export share. Using a large dataset for Chinese firms in 2000–2006, we find that changes in exchange rate levels play a significant role on both export extensive and intensive margins of Chinese firms. Compared to studies using macro data, our firm-level analysis allows us to control for firm and industry heterogeneity. Firm size and location matter. We do not find a difference between foreign and domestic firms in responding to exchange rate changes. Industry heterogeneity is also found to be important.     

COMPETITION OR MONOPOLY? COMPARING PRIVATIZATION OF LOCAL PUBLIC SERVICES IN THE US AND SPAIN

Differences in national traditions of public intervention, institutional arrangements and public service markets make local public services an area of great diversity. In this paper we undertake a comparative study of how local governments arrange for delivery of water and waste services in the US and Spain. We find levels of privatization are higher in Spain than in the US. We review organizational reform in the two contexts and compare service delivery data using national surveys from each country. We find lower and less stable privatization in the US stems in part from adherence to public choice emphasis on the benefits of market competition over public monopoly. By contrast, Spanish municipalities reflect an industrial organization approach, and create hybrid public/private firms which benefit from both market engagement and economies of scale available under monopoly production. We conclude that managing monopoly may be more important than competition in local service delivery.     

THE PUBLIC MANAGEMENT CHALLENGES OF CONTRACTING WITH NONPROFITS for SOCIAL SERVICES

ABSTRACT

States and municipalities increasingly pursue privatization as a way to deliver public goods and services because of two expected outcomes, reduced costs and quality improvements. Several reasons are frequently cited for these anticipated benefits ranging from market competition to increased management flexibility and discretion to fewer rules and regulations. One policy area in which government has privatized many services through contracting with nonprofit organizations is social services. Contracted services are as diverse as providing shelters for the homeless, vocational education and job retraining, domestic violence services, refugee esettlement, child and elder abuse services, and food banks. A proliferation of public administration and nonprofit organizational scholarship has examined a range of issues associated with the government-nonprofit social service contracting relationship, not the least of which are topics related to management, measurement, and accountability. This article examines the public management challenges and implications of contracting with nonprofit organizations for the delivery of social services.     

The Role of Competition in Best Value: How Far Does it Differ from CCT?

This article investigates the role of ‘competition’ within Best Value (BV) and compares it with that of Compulsory Competitive Tendering (CCT). Utilising results of a survey of BV lead officers, the article reveals that ‘competition’ is not being used as widely as may have been expected. However, in terms of outcomes, services subject to BV seem to be at least as likely to be provided externally as would have been the case under CCT. Further analysis also considers the impact that party political control and service type have on the use and outcomes of competition.     

What Drives For-Profit and Nonprofit Organizations’ Entry into Voucher Markets?

This study investigates a social service voucher program in Korea to examine why local governments rely on external actors, such as for-profit and nonprofit organizations, in provisioning social services and what encourages such market entry in view of the transaction cost theory. The social service voucher program, first introduced in 2007, offers a unique dataset of 1,101 local markets to examine how local governments are willing to stay in control of provisioning the nationwide program while promoting private actor entry. This study finds that local governments with lower fiscal capacities or in markets in which multiple existing organizations operate are more motivated to foster for-profit entry, whereas only existing nonprofit organizations in the market that provide the same services predict nonprofit entry. The implication is that the facilitation of for-profit entry is associated with local governments’ need to manage transaction costs, although this may not be true for nonprofit entry.     

Firm size and export behaviour: An Indian case study

In the context of Indian industry, this article argues that in the presence of capital market imperfections and sub‐optimal contractual arrangements, small firms face higher transaction or selling costs in the domestic market. One of the strategic responses by small firms towards overcoming the mobility barriers imposed by high transaction costs in the domestic market is to break into the competitive world market. Small firms that could realise a critical level of production efficiency and possible information externalities that arise through inter‐firm linkages might be the ones that could succeed in exports. The empirical observations derived from the analysis of firm level survey data provide reasonable support to the main arguments.     

Breaking up a partnership to build a competitive market in Denmark’s ambulance service: how can studies of contract reversals learn from the sociology of markets?

ABSTRACT

paper analyses a case of contract reversal in the market for ambulance services. The paper suggests that the sociology of markets-literature provides insights into market institutions of importance to relations between government and contractors that will benefit contracting out theory. Building on document analysis and interviews with 19 key stakeholders, it is demonstrated how a regional government in Denmark tried to wrestle the service provision from a long-time private provider and create a competitive market, only to discover that the implementation of the new contract was beset by obstacles largely stemming from informal norms in the market and attempts of the existing provider to hamper market entry for challenger firms. The result was a contract reversal: from private provision to government-provided service delivery. The paper contributes to the contracting out literature by providing a more elaborate understanding of the institutional conditions under which contract reversals can take place.     

INTERROGATING INSTITUTIONAL CHANGE: ACTORS' ATTITUDES TO COMPETITION AND COOPERATION IN COMMISSIONING HEALTH SERVICES IN ENGLAND

Since the beginning of the 1990s the public healthcare system in England has been subject to reforms. This has resulted in a structurally hybrid system of public service with elements of the market. Utilizing a theory of new institutionalism, this article explores National Health Service (NHS) managers' views on competition and cooperation as mechanisms for commissioning health services. We interrogate the extent of institutional change in the NHS by examining managers' understanding of the formal rules, normative positions and frameworks for action under the regime of the Health and Social Care Act 2012. Interviews with managers showed an overall preference for cooperative approaches, but also evidence of marketization in the normative outlook and actions. This suggests that hybridity in the NHS has already spread from structure and rules to other institutional pillars. The study showed that managers were adept at navigating the complex policy environment despite its inherent contradictions.     

The Nature of a Public Service

Public services have been misunderstood. They are not simply services in the public sector, they are not necessarily there because of “market failure”, and they cannot be analysed by the same criteria as market-based provision. They have four defining characteristics. They exist for reasons of policy; they provide services to the public; they are redistributive; and they act as a trust. They consequently operate differently from production for profit, in their priorities, costs, capacity and outputs.     

COMPETITIVE TENDERING IN THE NHS: AN ECONOMIC ANALYSIS' OF THE EARLY IMPLEMENTATION OF HC(83)18

Economic theory identifies circumstances where in-house production can be expected to be more efficient, in terms of the cost of production, than purchase from outside contractors. However, this efficiency advantage can also expect to be dissipated when in-house producers face no competition. The introduction of competitive tendering does not invalidate the case for in-house production; but significant cost savings can still be expected.
An in-depth analysis is made of six contracts put out to tender in the three hotel-type services. Markets for contracts were created, and open competition commonly brought about savings of one-third to two-thirds. Part of the cost saving was often achieved through a rationalization of services. Economic theory does not predict this result; but NHS management used the opportunities to introduce changes. Wage rates were usually cut and earnings fell by still more. Staff resignations and redundancies were common.     

Marketization, Managers and Moral Strain: Chairmen, Directors and Public Service Ethos in the National Health Service

Survival of the public service ethos in Britain has been called into question following introduction of the 'new public management' and marketizing reforms in much of the public sector. This article examines how these developments have occurred in the NHS, using survey data to analyse NHS board members' substantive ethical values. Unexpectedly the results suggest that NHS board members with a predominantly NHS background appear less ethically conservative, more flexible and less risk–averse than those recruited from non–NHS backgrounds; and that as yet the NHS management 'culture' is not very homogenous in respect of 'business ethics'. The NHS reforms also appear to accentuate the tensions between transparent public accountability in NHS management and incentives not to publicize certain types of information. Recent codification of NHS 'business ethics' can be understood as an attempt to buttress the public service ethos against the increased moral strains of a quasi–market.     

Russian Nonprofits as Contracted Providers of Municipal Social Services: Initial Experience

Abstract

In the Russian Federation the delivery of social services to deserving population groups is mostly the responsibility of municipalities and other local governments. Services are delivered by municipal agencies. One way to inject competition into the delivery system is for local government to hold competitions to contract for social service delivery. The competitions can be open to nonprofit organizations (NPOs), some of which have been providing assistance in recent years to needy individuals and families similar to those that would be contracted. This article reports the results of an assessment of pioneering pilot competitions for the delivery of social services in three municipalities in 2000–2001: Perm, Velikii Novgorod, and Tomsk. The objective of the pilots was to determine if the local governments could hire NPOs to be service providers following a rigorous and fair competitive process and whether the selected NPOs would do an adequate job in delivering services. In general the results of these competitions indicate the extent of the challenge to improving service delivery in Russia. It seems fair to say that the competitions in Perm and Tomsk were essentially a competitive grant process where the winners were more or less free to determine the services actually delivered. On the other hand, the Novgorod competition had much more in common with a contractual procurement of social services—the competition was nominally open to firms of all legal forms and the services were well-defined. In execution, the reality in Novgorod fell far short of this model.     

Policy Reforms and Evolution of Market Structure in an Emerging Economy: The Case of India

Policy reforms have facilitated entry of quite a few transnational corporations (TNC) into Indian industries. This has important implications for the evolution of competitive industrial structure. This article focuses on the issue of the response mechanism of local firms to competition from new entrant TNCs and the possible strategies of TNCs in penetrating the Indian market. It develops a conceptual framework by incorporating elements of intangible assets theory and new institutional economics into a simple sequential entry oligopoly model. This yields interesting insights into qualitative behaviour of firms in the post-reforms period. A few hypotheses drawn from the conceptual framework are empirically tested on the basis of firm level panel data drawn from a set of Indian industries.     

Municipal Service Delivery: The Role of Transaction Costs in the Choice between Alternative Governance Mechanisms

Service provision by local governments can be delivered using in-house bureaucracies, private firms, and partnerships with other governments or the not-for-profit sector. This production decision has been a major focus of discussion among scholars, practitioners and political agents for the last quarter of a century. The transaction costs framework is an important tool to analyse decisions regarding the production of local services. In this paper, the authors employ this framework to analyse service delivery in Portugal and find that service characteristics and the local political environment play a key role in local officials' choice among the three governance mechanisms to deliver public services.     

PUBLIC EXPENDITURE AND POLICY IMPLEMENTATION: THE CASE OF COMMUNITY CARE

This article explores the contention that the conventions of public expenditure accounting conceal, rather than reveal, the real nature and implications of resource trends. A benchmark — a constant level of service output — is established as a basis for examining the relationship between trends in expenditure inputs and service outputs. Changes in unit costs are identified as the major source of deviation between expenditure and output trends. The impact of resource constraint on policy and policy-implementation is then examined in relation to one, essentially stable, area of policy in the personal social services: community care.
The meaning of the term'policy' is far from straightforward and community care is best understood as the interaction of relatively independent streams of policy, towards service outputs and resource inputs, extant in both central and local government. Mechanisms by which policy streams could be reconciled are of particular interest and an innovative example — joint finance — is examined in some detail.     

The Structure of Indigenous Food Crop Markets in sub-Saharan Africa: The Rice Market in Uganda

Using data obtained from a series of nation-wide market surveys in Uganda, this article attempts to document and assess the domestic rice market at all stages in the post-harvest marketing chain from the farm gate to metropolitan area retail outlets. The criteria used are quantities marketed, prices, marketing margins, marketing costs and net returns to traders. The results show that the regional rice markets are integrated into the national market and that on average little surplus is left for rice traders at all market stages if marketing costs are accounted for. The spontaneously developed indigenous crop market works reasonably well.     

Compulsory Competitive Tendering And Local Government Financial Services: An Analysis Of The Views Of Local Government Accountants In The North West Of England

Between 1979 and 1997, successive Conservative governments sought to reduce the scale of public sector activity and to introduce competition in the provision of public sector services. A central feature of this policy was the introduction of compulsory competitive tendering (CCT). CCT was initially confined to blue collar services but, by means of the Local Government Act 1992, it was extended to white collar, professional services, including financial services. However, though potentially extremely significant, the support for and implications of such a policy are issues which have been inadequately researched. Because of this, research has been under-taken into financial services CCT and has included a questionnaire survey of 300 professionally qualified accountants employed in 17 local authorities in the North West of England, drawn from county councils, district councils and metropolitan authorities. The article presents the findings of the survey, with a particular focus on the views of accountants on CCT in general and financial services CCT in particular. In addition, it provides evidence that the CCT process, irrespective of views on CCT and its appropriateness for specific activities, has changed culture and attitudes in the case of local government finance professionals.     

Cooperation,not cost savings: explaining duration of shared service agreements

Among local governments, inter-municipal cooperation is the growing reform; but the literature is silent regarding the determinants of longer-term shared service agreements. We conducted a survey of all local governments in New York State in 2013 to assess the level of sharing across 29 public services. The duration of shared service agreements varies from 1 to 80 years. What explains this difference? Our hierarchical linear model shows that service sharing agreements fall along a cooperation continuum, where cost savings are a determinant of shorter agreements, while the public values of service quality and cross-jurisdictional coordination explain longer-term agreements. We also find that positive past experience with sharing partners increases the duration of sharing agreements. Our analysis lays the foundation for new theories of shared services that build directly from the benefits of improved regional coordination, inter-municipal reciprocity and service quality, not from theories based solely on competition and costs.     

THE THEORY AND PRACTICE OF MANAGED COMPETITION IN THE NATIONAL HEALTH SERVICE

This article presents qualitative and survey evidence on the implementation of managed competition in the NHS. After outlining the economic analysis of quasi-markets made by Le Grand and Bartlett, Part I argues that a framework derived from organization theory is a more fruitful way of analysing and understanding behaviour at local level. Part II describes the experience of implementation in four district health authorities, concentrating on the way key actors conceptualized market relations and the way market imperfections were addressed. Part III discusses the main reasons why implementation took the form it did and the factors shaping similar or dissimilar responses.     

The relationship between competition and efficiency of waste-collection services in the Czech Republic

This paper examines the role of the competition on the waste-collection market. Based on the case study of the Czech Republic, we evaluate the influence of competition intensity on supply side of the market on efficiency of waste-collection services. The rate of competition was approximated by the number of submitted bids to public tenders and efficiency was measured by per capita expenditures for municipal waste-collection services. We developed two regression models – the first model verified a competitive effect on the public procurement market for the provision of waste-collection services; the second model identified factors that affected municipal expenditures for waste-collection services per capita. We concluded that the competition in the waste-collection market increases by organising open tenders for suppliers at regular intervals, by adapting the duration of contracts to economic life of fixed assets, by sustaining pressure on service providers through a change in suppliers or the distribution of contracts among jurisdictions.