Privatization and Regulatory Reform of Toll Motorways in Europe

This article analyzes current trends in toll motorway privatization in Europe as an illustration of the paradox of simultaneous deregulation/privatization and reregulation. Changes in the form of government intervention are identified as transitions from internal control on processes and inputs to external control on performance outputs. The state guarantees its capability to intervene and seek its own objectives even when giving up public property. In fact, output regulation is a partial substitute for public ownership. We analyze the hypothesis that privatization of motorways spurs price regulation. Indeed, we observe that toll regulation becomes more detailed as the private sector increases in size, which is a regular reaction across different institutional frameworks. This result is consistent with the literature on the rise of a regulatory state, which emerges with a new mode of governance based on indirect government. Moreover, the study provides evidence of the importance of temporal context in modeling public sector restructuring.     

Disaggregating public-private governance interactions: European Union interventions in transnational private sustainability governance

Transnational private sustainability governance, such as eco-certification, does not operate in a regulatory or jurisdictional vacuum. A public authority may intervene in private governance for various reasons, including to improve private governance's efficient functioning or to assert public regulatory primacy. This article argues that to properly understand the nature of public-private governance interactions—whether more competitive or complementary—we need to disaggregate a public authority's intervention. The article distinguishes between four features of private governance in which a public authority can intervene: standard setting, procedural aspects, supply chain signaling, and compliance incentives. Using the cases of the European Union's policies on organic agriculture and biofuels production, the article shows that public-private governance interaction dynamics vary across these private governance features as well as over time. Furthermore, the analysis highlights the importance of active lobbying by private governance actors in influencing these dynamics and the resulting policy outputs.     

The determinants of the choice between public and private production of a publicly funded service

The public choice literature contains little formal analysis of the bureaucratic choice of production modes — public or private — of publicly funded services. An important question to be addressed is why some governmental bodies choose to provide a publicly funded service with publicly owned and operated production units whereas other governmental bodies contract with private firms to provide the same publicly funded service. This paper is the first formal attempt to remedy this gap in the literature. We develop a theoretical explanation of the government decision maker's choice between public and private production modes based on utility maximizing behavior. We then examine empirically this choice employing logit analysis. The empirical results, which include several tests for robustness, confirm our theoretical explanation. The results are significant and suggest that non-monetary constraints are an important factor affecting this choice of production modes and that monetary constraints are less influential.     

中国足球体制改革与监管体系建设--概念、问题与方向

2004年的俱乐部罢赛和国足冲击世界杯失利风波已经过去,足协领导也进行了调整,联赛也在正常地开展。这一切似乎表明,我们的足球事业在经历一番挫折后又步入正常发展的轨道。但我们对此却心存疑虑,原因就在于中国足球事业的体制仍然没有进行根本性调整,对足球与市场、政府的关系问题,有关方面似乎还没有非常清晰合理的认识。从足球是一种公共服务的角度论述了政府干预的必要性和干预的方式。文章认为,我国的足球产业正在经历结构性变革和制度转型,在产权私有化和收入市场化的同时,足球的管理方式没有转变或跟进。因此,如果不在适当的时机提出与足球本身特征和市场经济发展相符监管框架的话,在强烈的逐利动机驱使下,黑哨、假球、赌球、骚乱等不良行为很可能会再次成为争论的焦点。     

Effects of Public Ownership over Firms' Size and Overstaffing Problems

A model is presented to analyse the impact ofownership over the problem of excess of employmentgenerally found in public firms. A government has toprovide a service or build an infrastructure, underuncertainty about the valuation of the project byconsumers. Three possible ownership schemes areconsidered for the provision of this service: astate-owned firm, a private firm with a completecontingent contract, or a private firm with anincomplete contract. In all three schemes, the agentthat chooses the size of the project is always thegovernment, without any asymmetries of information.Even though multiple solutions are feasible and nodefinitive conclusion is found to be valid for allstates of nature, an evaluation of outcomes shows thata private firm tends to underprovide infrastructure orservices more often, while under public ownership thefirm is typically larger. If incomplete contracting isadded to the private firm case, the model exhibitssolutions in which outcomes could be socially worsethan those obtained by a public firm. Only changes inthe voting behaviour of workers and contracting costsare required in this model to derive these results.Thus, the paper provides an example that ownershipper se may have an effect on the size andefficiency of firms, even under symmetric informationconditions, an extreme that has been generally deniedin the literature on public firms and privatisation.     

The challenges of fractionalized property rights in public‐private hybrid organizations: The good,the bad,and the ugly

Policy designers seeking to harness profit‐driven efficiency for public purposes are increasingly creating organizations with fractionalized property rights that distribute “ownership” among public and private actors. The resulting hybrids are quite diverse, including mixed enterprises, public‐private partnerships, social entrepreneurship organizations, government‐sponsored enterprises, and various other hybrid forms. Marrying public purposes to private sector efficiency and strategic flexibility provides a tempting rationale for mixing public and private owners in hybrid organizations. Because public‐private hybrids involve fractionalized property rights, however, they exhibit tension among owners over both strategy and, more importantly, goals. To understand public‐private hybrids, we assess them in terms of six dimensions of property rights: fragmentation of ownership, clarity of allocation, cost of alienation, security from trespass, credibility of persistence, and autonomy (of both owners and managers). The unclear allocation of fractionalized ownership rights facilitates the appropriation of financial residuals and asset ownership opportunistically. Other weaknesses in the property rights configurations of public‐private hybrids create managerial dissonance or opportunistic behavior that typically leads to a narrowing of goals, but sometimes also to organizational failure.     

数字经济下的生产社会化与企业分工协作:演进与特性

数字经济是以数字化原料为劳动对象,利用数字化劳动资料进行生产活动的经济形式,在此基础上,数字技术经由企业分工协作体系的重塑推动着生产社会化的发展。依据马克思主义政治经济学原理,以企业分工协作为切入点,通过剖析企业间网络化分工协作和企业内部数字劳动过程,可发现并阐明数字经济下生产社会化中的最新进展及其双刃剑特性。该性质表明:数字经济既可以推动生产活动向社会化方向发展而代表更先进生产力,同时也会激化企业分工与社会分工、生产社会化与生产资料私人占有之间的矛盾。由此表明,数字经济下的生产社会化演进必将呈现出企业分工代替社会分工,以及所有制形式由生产资料私有制向公有制形式转变的发展趋势。     

Gorillas in the closet? Public and private actors in the enforcement of transnational private regulation

This paper examines to what extent the background presence of state regulatory capacity – at times referred to as the “regulatory gorilla in the closet” – is a necessary precondition for the effective enforcement of transnational private regulation. By drawing on regulatory regimes in the areas of advertising and food safety, it identifies conditions under which (the potential of) public regulatory intervention can bolster the capacity of private actors to enforce transnational private regulation. These involve the overlap between norms, objectives, and interests of public and private regulation; the institutional design of regulatory enforcement; compliance with due process standards; and information management and data sharing. The paper argues that while public intervention remains important for the effective enforcement of transnational private regulation, governmental actors – both national and international – should create the necessary preconditions to strengthen private regulatory enforcement, as it can also enhance their own regulatory capacity, in particular, in transnational contexts.     

Public versus private ownership: The federal lands case

“Privatization” of public lands has been urged on the grounds that it will provide a more efficient allocation of the nation's resources. However, there are some public policy objectives which private ownership and free markets are not equipped to achieve. Historically, these objectives have motivated legislation authorizing retention of some land in public ownership. Indeed, land in both forms of ownership is required to achieve a full range of both public and private goods and services. However, since inefficiencies in the allocation of resources will occur under either form of ownership, careful monitoring of economic activities in both sectors is more likely to achieve improvements than arguing for exclusive reliance on only one system of property rights.     

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.     

Rethinking Security: Organizational Fragility in Extreme Events

Providing public security is a fundamental function of government. As the class and degree of threat vary, government agencies must adapt to changing conditions or risk failing their basic mission. The events of September 11, 2001, illustrated the limits of governmental performance in identifying and interrupting actions intended to harm innocent citizens. These events are examined against the resources, range, and limits of governmental capacity to adapt to the emerging threat of terrorism, and an alternative perspective on administrative performance as a complex adaptive system is proposed. This perspective redefines the search for public security as a dynamic process that balances mechanisms of control with processes of information search, exchange, and feedback among public, private, and nonprofit organizations and is supported by a well–designed information infrastructure. The article concludes that the search for public security is an interactive learning process that, while guided by public organizations, must involve responsible participation by private and nonprofit organizations as well as an informed citizenry.     

“Grabbing Hand” or “Helping Hand”?: Corruption and the Economic Role of the State

This article seeks to disentangle which features of government intervention are linked to corruption and which are not, by distinguishing between the government roles of regulator, entrepreneur, and consumer. It finds that the degree of regulation of private business activity is the strongest predictor of corruption, and that high levels of public spending are related to low levels of corruption. There is no evidence of direct government involvement in production having any bearing on corruption. It is concluded that advanced welfare capitalist systems, which leave business relatively free from interference while intervening strongly in the distribution of wealth and the provision of key services, combine the most “virtuous” features of “big” and “small” government. This suggests that anti‐corruption campaigners should be relaxed about state intervention in the economy in general, but should specifically target corruption‐inducing regulatory systems.     

Efficiency in the provision of pure public goods by private citizens

This paper raises an old question and proposes a new answer. The question is, “Must public goods be produced by governments?” The consensus answer is “Yes,” on the grounds that transaction costs related to group size prevent all potential consumers of a public good from entering into voluntary arrangements to produce efficient levels of that good. Government intervention thus is required to achieve efficiency. Yet many obvious examples of public goods are not financed or even subsidized by government. Conspicuous examples of this phenomenon include the development of important innovations in technique in fields such as music (Bach and Beethoven), literature (Defoe, Dickens and Shakespeare, not excepting Homer or Adam Smith), and the visual arts (Cezanne), not to mention many crucial scientific discoveries. Indeed, the obvious public-good aspects of scientific knowledge induced many private societies to offer prizes for particular innovations. Two questions are raised by the private, voluntary provision of nonrival outputs or inputs: (1) what conditions contribute to this phenomenon, and (2) can voluntary provision come “close” to efficient provision? We suggest in this paper that, under certain conditions, the gains from many public goods whose benefits reach nationwide populations are largely realized at group sizes far smaller than even county or municipal jurisdictions.     

Impact of compulsory competitive tendering on the structure and performance of local government systems in the State of Victoria*

Around the world, the public sector is introducing private sector management practices. Abandoning the binary model of public and private sectors the State Government of Victoria introduced the compulsory competitive tendering system under which local government bodies are required to tender out their services to private sector service providers. The aim was to encourage local government bodies to operate in contestable situations so that they can increase efficiency, decrease operating costs, develop clear programme goals and objectives, become responsive to client goals, and improve the quality of goods and services. The article describes how the practice of the compulsory competitive tendering system has introduced major changes to organizational cultures, attitudes of employees, power and authority structures, sytems of decision making, delegation of financial and managerial authority, and the nature of control and accountability. In addition, the article explains the degree of competitiveness and efficiency that local government bodies have achieved and describes how the corporatized structure has helped to achieve the financial objectives. The article also discusses how the role of the elected councils is diminishing under this new management structure and argues that in the absence of a genuine monitoring system and accountability mechanism the local government bodies find it difficult to assert their role as quality service deliverers. This has forced the councils to comply with the requirements of the competition laws which have reduced direct accountability of government to the public. Copyright © 2000 John Wiley & Sons, Ltd.     

Who Owns What? Some Implications of the Humphry Report on Government Business Enterprises

Governments in Australia have long wrestled with the problem of managing the performance of government business enterprises (GBEs). In December 1996 the Finance Minister commissioned Richard Humphry to provide an 'internal review' of Commonwealth GBEs. While Humphry acknowledged the reality of many GBEs remaining in public hands for 'the foreseeable future', his report encouraged GBEs to be run more closely along private sector lines. According to Wettenhall, the long-term ramifications for Australia are significant, and the unique role, qualities and responsibilities of public ownership are in danger of being sidelined.     

Direct Government Investment: Perverse Privatization or New Tool of Government?

In recent years, public administration scholars have called attention to a blurring of the boundaries between the public and private sectors. However, little attention has been focused on the administration of public programs that seek to impact private markets through direct government investment in private firms. The direct government investment approach is a new tool of government that has been applied in several countries and at multiple levels of government. Through an analytic mix of theory and attention to practice, this article leverages a deep case analysis of the U.S. Department of Energy's Advanced Technology Vehicles Manufacturing Loan Program to propose and utilize criteria for examining justifiable rationales for direct government investment, areas of administrative capacity necessary to manage such investments, and potential pitfalls of this new tool of government.     

Deteriorating public and private sector relations in Central America

The Central American countries are divided by profound political differences. Yet surprising similarities exist in the changing relations between the public and private sectors. Throughout the region, public and private sectors lock into a vicious circle. The inability of the state to provide order and social harmony creates disincentives for the private sector to invest or even to continue existing levels of production. The government responds by increasing its responsibilities at the expense of the private sector. In doing so it assumes risks the private sector refuses, but further alienates the private sector nonetheless.     

The Incorporated Company as an Instrument of Government: A Quest for a Comparative Understanding

Privatization initiatives and the doctrines of "New Public Management" have led to incorporated companies assuming considerable significance within government in many countries. The implications of this development for the structure and operation of the modern state are potentially far-reaching, but are yet to be appropriately comprehended. In response, the article seeks to establish a framework for understanding the basic characteristics and use of companies from a comparative perspective. Attention is focused on their "publicness" and accountability as affected by their ownership, management, financing, and control, which can all involve a varying mix of the "public" and "private" sectors both domestically and internationally. An underlying belief is that a lot more research and analysis are required in this important area of organizational activity.     

Government Support Programs and Private Investments in PPP Markets

ABSTRACT:

Public-private partnerships (PPPs) have become an important tool for investing in and developing public infrastructure and services. However, many developing countries have failed to attract sufficient private investment from the PPP market. This article uses data from 4,484 PPP projects across 130 developing countries to investigate if and how distinct types of government support can attract more private investment. Results showed that capital, revenue, and in-kind subsidies directly provided from governments attract more private capital, while indirect supports through government guarantee policies do not. The institutional quality of a country enhances the positive relationship between direct government support and private PPP investments. Further, risk allocation plays a mediating role between government supports and private investment.     

Privatization and cost reduction

In this paper several examples of government contracts with private firms are examined to see how experience conforms to a principal-agent model of cost minimization via competitive bidding and how important are the many qualifications to the model. Fifteen cases of local government contracting are examined.The course of private contracting is not always smooth — as judged by the many contract disruptions observed and by the number of cities that believe they are no longer saving money by contracting and those which have resumed public production. It also seems to be the case, however, that competition generally reduces initial costs, that in many cases cost savings persist, that it is possible to stimulte competition, and that providing for continual interaction, as contrasted with simply monitoring performance, can prevent disruption.