The Proper Scope of Government: Theory and an Application to Prisons

@article{Hart1996ThePS,
  title={The Proper Scope of Government: Theory and an Application to Prisons},
  author={Oliver Hart and Andrei Shleifer and Robert W. Vishny},
  journal={Microeconomic Theory eJournal},
  year={1996}
}
When should a government provide a service inhouse and when should it contract out provision? We develop a model in which the provider can invest in improving the quality of service or reducing cost. If contracts are incomplete, the private provider has a stronger incentive to engage in both quality improvement and cost reduction than a government employee. However, the private contractor's incentive to engage in cost reduction is typically too strong because he ignores the adverse effect on… 
Private Operation with Public Supervision: Evidence of Hybrid Modes of Governance in Prisons
Received theories suggest a possible cost-quality tradeoff when private outsourcing arrangements are used in public services. Using data from Brazilian prisons, our study provides evidence that
Private operation with public supervision: evidence of hybrid modes of governance in prisons
Received theories suggest a possible cost-quality tradeoff when private outsourcing arrangements are used in public services. Using data from Brazilian prisons, our study provides evidence that
Government and Market Pathologies of Privatization: The Case of Prison Privatization†
The recent growth in the number of privately operated and privately owned prisons in the United States focuses our attention on the nature of the privatization arrangements employed in this setting.
Can Imprisonment Be Cheaper? The Law and Economics of Private Prisons
Custody is the most expensive method of punishment in the western world, as compared to other alternatives. Although expensive, prison is an indispensible instrument to deal with judgment proof or
How Privatization Affects Public Service Quality: An Empirical Analysis of Prisons in England and Wales, 1998–2012
ABSTRACT The impact of privatization on public service quality is an enduring issue in public policy and management. Advocates of privatization suggest that market forces prompt private firms to
Government Contracting with Faith-Based Providers: An Economic Perspective
This article analyses the policy debate surrounding the possible expansion of government contracting with faith-based providers of social services, from the perspective of recent developments in the
Private Contracting and the Hidden Cost of Burden Shifting: The Case of Prison Food
ABSTRACT Burden shifting is an increase in risk or responsibility for coworkers or clients caused by inadequate agent performance. In this study, focus group testimony from corrections officers is
Are nonprofit prisons an alternative? : Some experiences in the Netherlands
Outsourcing of detention is complex due to quality risks from incomplete contracts, the public responsibility for sentencing and execution, and related social opinions. In the Netherlands, prison
The Modes of Provision of Prison Services in a Comparative Perspective
This paper aims to compare the performance of two modes of provision of prison services: public, and with the participation of private companies. There are few empirical studies concerning the
Organizing Prisons through Public-Private Partnerships: a Cross-Country Investigation
In this paper, we analyze the private participation in prison services in three countries: Brazil, France, and the United States. We highlight striking differences in efficiency between these
...
...

References

SHOWING 1-10 OF 62 REFERENCES
Private Prisons: Cons and Pros
The debate over the privatization of criminal justice services, especially of imprisonment, has featured prominently in the ongoing controversy over the proper scope and size of government. In the
The Costs and Benefits of Privatization: An Incomplete Contracts Approach
This article develops a model of privatization using an incomplete contracts approach. We argue that different allocations of ownership rights lead to different allocations of inside information
Privatization in the United States
Privatization in the United States
In the United States, the two principal modes of producing local government services are inhouse provision by government employees and contracting out to private suppliers, also known as
The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration
Our theory of costly contracts emphasizes that contractual rights can be of two types: specific rights and residual rights. When it is costly to list all specific rights over assets in the contract,
Prisons for Profit: Public Justice, Private Interests.
MF01/PCO2 Plus Postage. Bids; *Competition; Contracts; *Correctional Institutions; Cost Effectiveness; *Entrepreneurship; Prisoners; *Private Agencies; *Public
The Privatization Decision: Public Ends, Private Means
The Stakes * The Architecture of Accountability * Privatization and Public Spending Evidence And Arguments * Organizational Form and Function * The Evidence On Efficiency * The Terms of the
The Determinants of Price and Quality in Competitively Tendered Contracts
Traditional analysis of the impact of competitive tendering on service provision has focused on costs and prices. Critics have argued that price reductions lead to lower quality. We tested this
Politicians and Firms
We present a model of bargaining between politicians and managers that explains many stylized facts about the behavior of state firms, their commercialization, and privatization. Subsidies to public
Property Rights and the Nature of the Firm
This paper provides a framework for addressing the question of when transactions should be carried out within a firm and when through the market. Following Grossman and Hart, we identify a firm with
...
...