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.     

Addressing the shortage of kidneys for transplantation: purchase and allocation through chain auctions

Transplantation is generally the treatment of choice for those suffering from kidney failure. Not only does transplantation offer improved quality of life and increased longevity relative to dialysis, it also reduces end-stage renal disease program expenditures, providing savings to Medicare. Unfortunately, the waiting list for kidney transplants is long, growing, and unlikely to be substantially reduced by increases in the recovery of cadaveric kidneys. Another approach is to obtain more kidneys through payment to living "donors," or vendors. Such direct commodification, in which a price is placed on kidneys, has generally been opposed by medical ethicists. Much of the ethical debate, however, has been in terms of commodification through market exchange. Recognizing that there are different ethical concerns associated with the purchase of kidneys and their allocation, it is possible to design a variety of institutional arrangements for the commodification of kidneys that pose different sets of ethical concerns. We specify three such alternatives in detail sufficient to allow an assessment of their likely consequences and we compare these alternatives to current policy in terms of the desirable goals of promoting human dignity, equity, efficiency, and fiscal advantage. This policy analysis leads us to recommend that kidneys be purchased at administered prices by a nonprofit organization and allocated to the transplant centers that can organize the longest chains of transplants involving willing-but-incompatible donor-patient dyads.     

Proposal for a future delivery market for transplant organs

Improvements in surgical procedures and immunosuppressive practices have greatly increased the range and success rate of organ transplants. Unfortunately, supply does not meet demand, and demand is increasing. This paper documents the current level of unsatisfied demand for several transplantable organs, and argues that the extant system of altruistic organ donation is unlikely ever to provide adequate supply because of lack of incentives to donate and the ambiguity surrounding property rights over transplantable organs. A greater reliance on markets would help attenuate these problems. However, unorganized private spot markets for human organs are likely to be both inefficient and inequitable, and are perceived as morally offensive. A feasible alternative is an organized, publicly operated future delivery market, wherein an individual can contract, for valuable consideration, with a government agency for delivery of a specific organ upon death. The implementation of such a market would encounter difficult (but not intractable) problems such as price determination, the selection of a medium of exchange, and contractual issues, particularly the role of minors in such a system. Finally, it is argued that such a market is superior to the much-discussed compulsory expropriation alternative.     

Toxic chemical regulation in Canada: preliminary estimates of costs and benefits

Abstract. This paper makes an assessment of the impact of toxic chemical regulation in Canada. Ranges of costs and benefits, supplemented by survey information, analogous American data, interviews and case studies have been used to demonstrate the general usefulness of a cost-benefit framework for public sector decision-making even where information availability is constrained and complete analysis is not feasible. It is concluded that, with few exceptions, the impact of environmental regulation on chemical producers in Canada is neither excessive nor unduly onerous. Sommaire. Les auteurs de cette étude évaluent l'impact de la réglementation se rapportant aux produits chimiques toxiques au Canada. Des gammes coûtsrendements, étoffées par une enquête, des données américaines de même nature, des entrevues et des études de cas ont servi de base pour démontrer l'utilité générale d'un cadre coêts-rendements au niveau de la prise de décision dans le secteur public, même lorsque l'information est limitée et qu'une analyse complète est impossible. lls concluent qu'à quelques exceptions près, les règlements sur la protection de l'environnement ne sont, pour les fabricants de produits chimiques au Canada, ni excessifs ni trop onéreux.     

Net loss: A cost‐benefit analysis of the Canadian Pacific salmon fishery

This article applies cost‐benefit analysis to the Canadian Pacific commercial salmon fishery. It demonstrates that government policies to preserve the fishery have resulted in higher net social costs than would have resulted from a "do nothing" policy, notwithstanding the rent dissipation associated with unconstrained resource exploitation. The value of landings and the private costs of the harvest over a cycle (1988‐1994) are calculated. On average, fishers extracted rents of C$34.7 million (in constant 1995 Canadian dollars) annually. The public costs of enhancing the resource and organizing and policing the harvest are estimated. When these costs are included in the calculation, net benefits drop to an average of negative C$55.6 million annually. This translates into a net present value (NPV) of the salmon fishery of negative C$784. The effects on NPV of both modest policy changes implemented in 1996‐1997 and of a more dramatic but credible fleet rationalization program are provided. The results indicate that further policy change is called for. More generally, the study shows that policy reform that would significantly benefit both the private sector (through reduced rent dissipation) and the public sector (through reduced government expenditures) can be surprisingly difficult. © 2000 by the Association for Public Policy Analysis and Management.     

Combining Citizen Participation and Expert Analysis: A Wild,Wild Horses Problem in British Columbia

Local governments face increasingly complex decisions and must inevitably rely on professional staff with specialised knowledge. However, ordinary citizens and stakeholders are demanding the right to directly participate in governmental decisions. What is the appropriate division of labour? The article proposes a practical approach to participatory decision making that tries to combine administrative efficiency and democratic legitimacy. The approach decomposes the decision problem into a number of discrete stages. An action research methodology is used to illustrate the application of the method. Specifically, we decompose a ‘roaming horse’ problem in the interior of British Columbia to identify the information requirements for each stage of the model. We use a series of web-based Delphi surveys to elicit specific information from citizens regarding objectives and potential alternatives. The survey results suggest that a relatively simple and cost-effective deliberative tool like Delphi can facilitate an effective division of labour between citizens and government experts.