Prison labor markets: The supply issue

Putting prisoners to work has widespread appeal, but the nature of prison labor markets suggests that prisoners may have little incentive to work. The inmate population exhibits sociodemographic and psychological characteristics that correlate highly with labor market difficulties. Moreover, work incentives are bounded by both a guaranteed minimum standard of living and severe restrictions on the uses of earnings; prison is essentially a ration regime The impact of these institutional arrangements also depends upon the duration of the prisoner's remaining sentence and expected remaining lifetime. Unfortunately, there is little evidence bearing on these concerns, and experimental analysis is proposed.     

The biology-policy interface: Theories of pathogenesis,benefit valuation and public policy formation

This paper reviews some of the basic concepts of cost and risk-benefit analysis in the context of toxic chemical regulation and discusses several critical complexities inherent in the practical application of this methodology. The broad qualitative use of risk-benefit analysis can be an important aid to the decision-making process. It is concluded, however, that the full-scale incorporation of a rigorous form of risk-benefit analysis into the regulatory process is inappropriate at this time and could have significant and unintended consequences.The authors wish to express their gratitude to their colleagues, Professors Norm Carruthers, Denton Marks and Dean Uyeno, and an anonymous referee for their instructive comments on an earlier draft of this paper.     

Ownership versus competition: Efficiency in public enterprise

Certainly the introduction of product market competition into potentially competitive or, at least contestable, markets can improve performance. To take just one example, Morrison and Whinston (1986, 1986) estimate that even in the imperfectly contestable U.S. airline industry, the annual U.S. welfare gains from deregulation have been around $6 billion.But this paper argues, and further buttresses empirically, that ownership also matters and matters a lot. This does not necessarily imply that private ownership is always preferable to public ownership. PCs also engage in rent-seeking where possible, but they will try to maximize realizable rents by (relatively) keeping down production costs. Of course, where there are massive economies of scale and scope, high entry barriers, or externalities, public ownership may be preferred. (see Vickers and Yarrow, 1988).     

Costs and benefits through bureaucratic lenses: Example of a highway project

This article characterizes the perceptions of government bureaucrats about cost-benefit analysis (CBA). The observations arise after working with government officials on various projects and leading many executive seminars for government employees over the last decade on the principles and practice of CBA. Government employees tend to adopt one of three conceptual lenses: Guardians, Spenders, and Analysts. These perspectives differ sharply from one another, resulting in completely different meanings to the words benefits and costs. The orientation of Guardians is to “revenue-expenditure” analysis, while Spenders are oriented to “constituency-support” analysis. Analysts are oriented to standard CBA. The differences in perspectives are illustrated using an ex ante CBA of a proposed toll highway project.     

Public‐private partnerships in Canada: Theory and evidence

Abstract: This article develops some theory on and examines the implementation and performance of Canadian public‐private partnerships (P3s). It focuses primarily on infrastructure projects and addresses three questions: 1) What goals do governments expect to achieve through P3s? 2) How effective are P3s likely to be at delivering value to governments and citizens? 3) What lessons can be derived from the use of P3s? The article reviews the government's intended social goals for P3s and evaluates how effective P3s have been in fulfilling them. It then formulates a more comprehensive framework and outlines a “positive theory” perspective of P3s that takes into account the divergent goals of the partners – profit maximization goals of private‐sector participants and the political goals of the public sector. The article evaluates and summarizes the findings and implications of ten Canadian P3s. The appropriate test of success, from a social (normative) perspective, is whether P3s have lower total social costs, including production costs and all of the transaction costs and externalities associated with the project. The ten case studies indicate that the potential benefits of P3s are often outweighed by high contracting costs due to opportunism generated by goal conflict. These costs are particularly high when construction or operating complexity is high, revenue uncertainty (use‐risk) is high, both of these risks have been transferred to the private‐sector partner, and contract management effectiveness is poor. In infrastructure projects, it rarely makes sense to try to transfer large amounts of risk to the private sector. Sommaire: Le présent article élabore une théorie et examine la mise en œuvre et la performance de partenariats des secteurs public/privé canadiens (P3). Il se penche essentiellement sur des projets d'infrastructure et aborde quatre questions : 1) quels objectifs les gouvernements prévoient‐ils atteindre en ayant recours aux P3 ? 2) Dans quelle mesure les P3 seront efficaces à fournir de la valeur aux gouvernements et aux citoyens ? 3) Quelles leçons peut‐on tirer des P3? L'article passe en revue les justifications normatives avancées par le gouvernement pour les P3 et examine leur efficacité. Ensuite, il formule un cadre normatif plus exhaustif. Puis, il présente les grandes lignes d'une perspective de «théorie positive» des P3 en tenant compte des objectifs divergents des partenaires : à savoir, les objectifs de maximisation des profits pour les participants du secteur privé et les objectifs politiques du secteur public. Par la suite, l'article passe en revue et évalue dix études de cas de P3 canadiens. Le test du succès, selon une perspective (normative) sociale, consiste à déterminer si les P3 ont des coûts sociaux totaux inférieurs, y compris les coûts de production, et tous les coûts de transactions et coûts externes associés au projet. Les dix études de cas indiquent que les avantages potentiels des P3 sont souvent surpassés par les frais élevés de passation de contrats dûs à l'opportunisme généré par les conflits en matière d'objectifs. Ces coûts sont particulièrement élevés lorsque la complexité de la construction ou de l'exploitation est élevée et que l'incertitude des revenus (le risque d'utilisation) est forte, que ces deux risques ont été transférés au partenaire du secteur privé, et que l'efficacité de la gestion du contrat est médiocre. Dans les projets d'infrastructure, il est souvent absurde d'essayer de transférer de grands montants de risque d'utilisation au secteur privé.