Social Heterogeneity and Optimal Mix Between Public and Private Provision of Public Goods

With a framework of incomplete contract, this paper shows that for provision of public goods such as medicare and education, pure privatization may not promote competition. On the contrary, the co-existence of public and private provision may enhance de facto competition. Two competitive effects are identified. When consumers are heterogeneous, the co-existence of public and private ownership gives consumers freedom to choose from different ownership, improving allocation efficiency (Tiebout effect). While consumers are homogeneous, the co-existence can promote yardstick competition, squeezing out information rents from both ownerships, improving production efficiency (benchmarking effect). In either case, the co-existence dominates unique ownership. The paper ends up with some implications for China.s medicare and education reforms. Yongqin Wang is an assistant professor at China Center for Economic Studies, Fudan University and Haibo Xu is a M.A. student in economics at the same center. We thank Te Bao, Zhao Chen, Sujian Guo, Ming Lu, Yew-Kwang Ng and Teague Savitch, and anonymous reviewers for valuable comments.     

Taxes, Subsidies, and Listeners Like You: Public Policy and Contributions to Public Radio

Public radio in the United States receives both direct and indirect government funding. Direct subsidies come in the form of lump-sum and matching grants, while indirect subsidies proceed from tax revenues forgone on tax-deductible private donations. Each of these sources of government money affects charitable giving to public radio. This article estimates both of these effects, using data on 91 public radio stations in the United States during 1995. Data analysis shows that public funding to stations has a positive impact on private giving, but this impact rapidly decreases as the level of government subsidies increases. The analysis also indicates that increases in state tax rates correspond with significantly higher donation levels. This article explores the implications of these and other findings for policy makers, public administrators, and nonprofit managers.     

Private Versus Public Charity: Reassessing Crowding Out from the Supply Side

This paper tests a model where governmentand private charity are perfect substitutesin consumption, but the cost of providingcharitable assistance differs betweenprivate and government suppliers. Theanalysis demonstrates that higher costs oftransferring through the government canaccount for the observed phenomenon of lessthan complete crowding out and theempirical results are broadly consistentwith that approach. Overall the evidenceis consistent with the hypothesis thatindividuals both care about the leakagesinvolved in transferring funds to the poorthrough government and respond in theirprivate giving to changes in thedifferential public cost.     

The Obligation to Contribute to Discretionary Public Goods

The principle of fairness, first introduced by H. L. A. Hart in 1955, is able to support a workable theory of political obligation upon liberal premises. In a previous paper, 'Presumptive benefit, fairness, and political obligation', I argued that the principle can establish general obligations to cooperate in the provision of 'presumptive public goods' (that is, public goods that are indispensable to the typical member of society). Because a wider range of governmental services is necessary for the provision of presumptive goods, the principle also supports obligations to support 'discretionary public goods' (goods that are desirable but not indispensable). The 'indirect argument' developed in this paper counters the criticisms of my previous paper presented by A. John Simmons in 'The anarchist position: a reply to Klosko and Senor'.     

民营经济发展过程中的公共政策创新——温州地方政府政策的演变与分析

地方政府作为正式制度供给的主体之一,在民营经济发展过程中起着特殊而又重要的作用。以温州民营经济发展为背景,实证描述和分析了地方政府政策在突破旧制度约束过程中所呈现出的显著跃迁性的特征。温州地方政府适时的政策创新,促使民营企业的非正式制度创新逐步转变为正式制度安排,为民营企业从非法走向合法奠定了坚实的基础。温州地方政府在公共政策设计过程中,既符合了温州民营企业的利益和制度知识,又符合了政策者的既得利益和意识目标,政策供给兼备了社会可行性和组织可行性,从而使得政策效能得到了充分的发挥。     

Public and Private

The problem of public and private is often thought to be a boundary problem. 'Public' and 'private' are said to denote separate areas of human endeavour—distinct 'realms', 'spheres', or 'spaces'. The task of formulating clear boundaries, however, has proven to be enormously complex. It seems that every attempt at conceptualizing a purely private area of activity runs into a particular kind of difficulty, namely, many of the activities characteristic of the private sphere turn out to be activities toward which no responsible public authority could possibly remain indifferent: abuse within the family, collusion in the business world, criminal conspiracy among friends.
It may be, however, that the problem of public and private, conceived as a boundary problem, is thereby misconceived. It would perhaps be better to think of public and private as denoting not primarily—perhaps not at all—separate realms of endeavour but different ways of being in the world, different 'manners of acting'. To act in a private manner is simply different in character from acting in a public manner. Such a formulation, if pursued with care, would allow us to accept fully the arguments of those who would question the very idea of a private realm, while still permitting us to retain a vigorous and compelling public/private distinction.     

公共产品的生产效率探析

公共产品的生产效率问题,从本质上看,是政府如何对生产机构进行选择和监督的问题,其结果取决于进行公共产品生产的具体组织方式特点。公共产品生产组织方式主要有国有机构垄断生产、私人机构垄断生产和竞争生产三种类型组合。垄断条件下私人机构的生产效率高于国有机构,竞争条件下的生产效率高于垄断,且在竞争条件下国有机构可能达到与私人机构同样的效率水平。从理论上对影响公共产品生产效率的各类因素进行分析和总结,是提高公共产品生产效率的现实选择。     

Reappraising Institutional Contributions to the Efficiency of Environmental Policy

Books reviewed in this article:
Lawrence S. Rothenberg, Environmental Choices: Policy Responses to Green Demands
David M. Driesen, The Economic Dynamics of Environmental Law     

Purchasing Policy Advice: The Limits to Contracting Out

Throughout the OECD, governments have been contracting out an increasing range of goods and services. Against this background, this article outlines the case for, and assesses the merits of, placing the purchase of governmental policy advice on a more competitive basis. Two options are given particular attention: first, the creation of an internal market for policy advice within the public sector under which departments and other government agencies would tender to supply specific policy outputs; and second, a more radical option under which public and private sector organizations would compete for the contracts to supply governmental policy advice. Drawing on the insights of the new institutional economics, it is argued that neither option is likely to enhance the efficiency or effectiveness with which policy advice is produced, whether under conditions of short-term or long-term contracting. This is due to the likelihood of: only partial contestability (due, among other things, to asset specificity in the form of transaction-specific expertise and trust); a greater risk of opportunistic behavior by the suppliers of advice (and also, under some conditions, by the purchasers); higher agency costs and transaction costs; and greater problems with respect to horizontal and vertical policy coordination. Such considerations suggest that the widespread reliance of governments on relatively permanent advisory institutions and in-house expertise can be explained and justified on the same theoretical grounds that have prompted the contracting out of other publicly-funded goods and services.     

Seeking to Inspire Public Policy Analysts

The 1997 Public Policy Network Conference was held at Melbourne University's Centre for Public Policy. John Chesterman, one of the organisers, provides a taste of the debates.
The 1998 Public Policy Network Conference will be held at Victoria University, Wellington, on 29 and 30 January. Enquires or offers of papers may be forwarded to Dr RJ Gregory (e-mail Bob.Gregory@vuw.ac.nz ).     

Private Preferences for Public Goods: Towards a Model for the Interaction of Pressure Group and Electoral Politics

This essay explores two contrasting paradigms of collective action in the context of some observed anomalies in the development of the welfare states, focussing on private interest mod& of public expenditure growth versus models emphasising social choice and the degree of congruence between the political responsiveness of interest groups to the public expenditure crisis since the early 1970s, and the assumptions underpinning these models on political behaviour in the mixed economies. A bifurcation of the political system, resulting from the development of systems of functional interests representation alongside parliamentary and representative government, gives rise to a potential for strong governments to maintain regime support because of, rather than despite, the political fragmentation of majorities.     

Public Budget Choices and Private Willingness to Pay

Efficient allocation of public funds depends upon good information about citizens' values. The purpose of this paper is to demonstrate how citizens' values can be obtained by eliciting marginal willingness to tradeoff (MWTTO) ratios for public spending categories and linking these ratios to individual, private willingness to pay. The link enables estimation of the willingness to pay for an expansion to any of the budget categories based on the elicited willingness to pay and the marginal willingness to tradeoff ratios. Tradeoff ratios and willingness to pay are estimated for public budget categories in Kentucky based on a representative sample surveyed by mail and the web in 2007. Estimates show that individuals are willing to pay the most for an expansion to educational services, followed by health care.     

Segregation and Inequality in Public Goods

Many U.S. cities function without regular problems. They have well‐kept roads, sewers that never overflow, and public parks with swing sets and restrooms. Others struggle to maintain balanced budgets, fail to adequately equip or staff their police forces, and offer little assistance to residents of limited means. What explains these differences? I argue that segregation along racial lines contributes to public goods inequalities. Racially segregated cities are also politically polarized cities, making collective investment more challenging and public goods expenditures lower. I provide evidence for this argument using election data from 25 large cities and demographic data matched to city finances in more than 2,600 places. To handle the problem of endogeneity, I instrument for segregation using the number of waterways in a city. I find that segregated municipalities are more politically polarized and spend less on a wide range of public goods.     

社区公共物品与社区治理--论城市社区"四轮驱动、一辕协调"的治理结构

城市社区日益成为社会公共物品供给与消费的基本单元.然而,在既有的政府垄断性供给体系下,社区普遍存在公共物品供给短缺.改革传统的管理与服务方式,建立新的公共物品供给体系,满足社区不断增长的需求,已成为城市社区建设的中心任务.在众多的创新实践中,"社区治理"不失为一种可行的思路.本文遵循社区治理的理念,尝试将其深化并落实到体制层面,提出"四轮驱动、一辕协调"的社区治理结构与运作模式,并建议首先在"危改回迁社区"中试点.     

Policy Consulting and Public Policy

The changing nature of governance in Australia over the last two decades has given rise to a broad range of new strategies to review the development and delivery of government policies and programs. Key factors affecting the relationship between citizens and the state have been the deregulation and liberalisation of the Australian economy, with its focus on the market for the delivery of services, once the exclusive domain of public sector organisations. The increased use of consultants over this period is an example of governments going to the market for professional services. Effective policy development and review by consultants requires that they be well versed both in the substantive issues surrounding the policy field as well as in the process required to properly frame and evaluate these issues.     

Rationing Consumption of Private Goods that Produce Collective Bads

This article looks at collective decisions over the limits to consumption of a private good that produces a collective bad and studies the way in which these decisions are affected by changes in the distribution of wealth. It shows that a democratic voting program reduces the maximum permissible consumption of the good, whereas a benevolent planner, and a voting program dominated by the rich, will increase this level. It also shows that, under all programs, production of the bad is driven down by increases in inequality.