Disentangling the demand function from the production function for local public services: The case of public safety

In this paper we develop a theoretical framework and an econometric model which allow us to separate the effect of income and other socioeconomic variables on the demand for publicly provided goods from their effect on the price of those goods. We apply our approach in a study of expenditures for police protection in a cross-section of 73 U.S. cities and counties. Our results suggest that studies of public expenditures which fail to incorporate community characteristics in production and cost functions can yield very misleading results.     

A comparative analysis of the output measures of local public services

Summary and conclusion This study examines the robustness of the expenditure levels specification of the local government services. An alternative benefit specification is developed in which the expenditure levels of the education services and public safety provisions are replaced by the "benefits" of these services. Comparison of the regression results of these alternative specifications indicates that the output specification of the local services yields unexpected signs on the coefficients of some of the services. However, the coefficient on the effective tax rate in the output regression is very similar to that in the expenditure one.     

One for all and all for one: privatization and Universal Service provision in the postal sector

Universal Service provision has a special role for the public utilities sector in many Organization for Economic Co-operation and Development (OECD) countries. These public utilities have largely been subject to privatization during the last 3 decades. Efficiency effects of privatization are widely documented while the impacts on the quality and accessibility of the Universal Service are not much examined. By using a unique dataset on privatization for 21 countries over the period 1980–2007 for the postal sector, we are able to show that privatization, in particular formal privatization, has led to a decrease in the quality of the Universal Service.     

Contracting for tacit knowledge: the provision of technical services in technology licensing contracts

Recent research on the economic payoff from new technology has emphasized the importance of tacit knowledge or know-how. This paper shows that arm's length contract can overcome the problems in contracting for know-how by bundling complementary inputs with know-how in a technology package, and leveraging the superior enforceability of contracts over the latter. In the empirical part of this paper, the relationship between bundling and transfer of know-how is analyzed, using Indian data. The results imply that tied sales of inputs may increase the efficiency of contracts involving the transfer of know-how. A striking result, in the context of the current North-South debates on intellectual property rights, is the packaging of patents with know-how.     

The value and consequences of using public health technology assessments for private payer decision-making in Canada: one size does not fit all

Background: Both public and private insurers provide drug coverage in Canada. All payers are under pressure to contain costs. It has recently been proposed that private plans leverage the public health technology assessment (HTA) evaluation process in their decision-making.

Objectives: The objectives of the current study were to examine use of public health technology assessments (HTAs) for private payer decision-making in the literature, to gather the perspectives of experts from both public and private insurers on this practice, and to summarize which value parameters of public evaluations can be used for private payer decision-making.

Methods: A targeted literature review was conducted to identify publications on the use of public HTA or cost-effectiveness data for private payer decision-making on pharmaceutical reimbursement. Concurrently, a roundtable meeting was organized with invited panelists, including private payer representatives and health economic consultants (total n?=?9). The findings from both were synthesized and expressed in qualitative terms using the PICO framework.

Results: The targeted review identified 20 studies meeting the inclusion criteria, primarily originating from the US and Canada. The panelists felt that, despite some similarities, there were substantial differences between both systems. The PICO framework highlighted the issues with transferability between the two systems. Most of the value parameters were either not applicable, needed to be added, needed to be adjusted, or their applicability to private payer systems needed to be confirmed.

Conclusion: Some components of public HTA may be relevant for private payers, however there are reservations that still exist on whether the HTA process in Canada, designed for a public system, can address the informational needs of private payers. Private insurers need to use caution in assessing which value parameters from public HTAs can be used and which need to be confirmed, ignored, enhanced, or adjusted. One size HTA does not fit all applications.     

Social contracts for real moral agents: a synthesis of public reason and public choice approaches to constitutional design

Citizens in contemporary democratic societies disagree deeply about the nature of the good life, and they disagree just as profoundly about justice. In building a social contract theory for diverse citizens, then, we cannot rely as heavily on the theory of justice as John Rawls did. I contend that Rawlsian liberals should instead focus on developing an account of constitutional choice that does not depend on agreement about justice. I develop such an account by drawing on the contractarian approach to constitutional choice pioneered by public choice theorists, especially James Buchanan. With some modifications, public choice can help identify mutually justifiable constitutional rules based on the extent to which these constitutional rules produce appropriate laws under normal conditions. This new, synthetic approach to constitutional choice also helps to explain the moral significance of contractarian agreement for the public choice theorist.     

Determinants of adaptation costs in procurement: an empirical estimation on Italian public works contracts

It is widely agreed that rules governing public procurement should be designed to achieve value for money. However, in the public works sector, ‘…?the good being procured is usually complex and hard to be exactly specified ex ante, …?[and] alterations to the original project might be needed after the contract is awarded. This may result in considerable discrepancies between the lowest winning bid and the actual costs that are incurred by the buyer’ (Bajari et al., 2006). There is now a wide body of literature focusing on cost escalation during the execution of contracts and their estimates reveal that it can be often quite large. This article is aimed at offering an empirical test of the determinants of adaptation costs in the public works procurement. Using a detailed data set on Italian public works contracts, we run an empirical analysis, grounded on the main conclusions reached in the literature, to test for the main drivers of adaptation costs.     

中国财政竞争与地方公共支出结构分析

This article examines the impact of intergovernmental fiscal competition on local public expenditure in China under current performance assessment system in which GDP is a critical factor. First, we present the assignment of public goods and tax burden and the share of foreign direct investment (FDI) of 30 provinces, and we find that current fiscal competition in China has taken the form of public expenditure improvement accompanied by preferential tax policies. Second, we regress the share of FDI on different components of provincial public expenditure, and find that the share of FDI is correlated negatively with the public service, tax burden and health care service while positively with infrastructure development. Therefore, FDI-based infrastructural investment crowds out public services investment, which fails to support the view that fiscal competition improves social welfares.     

Quantities,qualities and multiple public services in the Tiebout model

This paper introduces a new, more realistic characterization of local public services. This characterization fits education, parks, and streets, none of which are a pure Samuelsonian good. It is shown that Tiebout's hypothesis holds for this new type of services, provided correct user charges are adopted. Introducing several local services considerably affects the results. The paper emphasizes the difference in tastes with regard to quality as opposed to quantity. Earlier literature is shown to apply to the role of quality and ignores the role of quantity. The effect of the latter makes mixed communities more efficient than segregated ones. It is shown that efficient allocation with mixed communities is an equilibrium in a costless mobility, Tiebout-type setting.     

对人力资源社会保障公共服务法治化的思考

随着社会的不断发展,我国人力资源社会保障的服务水平和标准也在不断提升,尤其是就业创业、社会保险、人事人才等公共服务职责,更是不断抓服务重点,将政府的服务职责充分发挥出来。要知道,人力资源社会保障作为政府的重要供给部门,其对社会主义现代化建设的稳步推进有着至关重要的作用,因而做好其服务项目的法制化工作十分必要。本文从其社会保障公共服务的项目、主体、标准、程序、和责任方面对其法制化进行分析,为其改善其公共服务提供有益参考。     

School competition and the quality of education: introducing market incentives into public services

Existing research indicates that introducing school choice and competition into the public education system might improve the quality of schooling. Yet, up to date most empirical work on school choice has concentrated on developed countries and it is far from obvious that the experience of these countries can be of any guidance for transition economies. Our work intends to fill this gap. We concentrate on the case of Poland. We argue that in Poland, school choice and competition tends to improve average education quality and efficiency of public education expenditure.     

The quality-access tradeoff in decentralizing public services: Evidence from education in the OECD and Spain

Decentralized delivery of public services should enhance constituents’ ability to hold politicians accountable and improve public service outcomes, according to theory. Yet, decentralization has not consistently yielded those improvements. This paper uses a novel cross-country panel from the OECD to show that decentralization generally improves students’ access to education, but in so doing, it creates congestion effects which diminish the overall quality of education that students receive. We argue that this is partially explained by the incentives of sub-central governments upon receiving their new authority. Sub-central governments are more incentivized than national ones to pursue policy improvements that are more visible and quicker to achieve, even when they are costly – like improving access – over improvements that are less visible and take longer to achieve – like increasing quality. Decentralization should therefore result in positive effects on education access and negative on quality, consistent with our findings. We directly test the impact of political incentives on responses to decentralization by exploiting the timing of education decentralization in Spain (1980–99), and variation in the political assertiveness of regional governments, using generalized difference-in-differences and synthetic controls. As predicted, the magnitude of decentralization's effects is greater for assertive regions, which are most incentivized to prioritize high visibility, costly policies.     

Reforming the local public sector: economics and politics in privatization of water and solid waste

Several empirical studies have analyzed the factors that influence local privatization. We examine the influence of transaction costs and political factors on local governments’ choices through new variables. We consider two relevant services accounting for different amounts of transaction costs: water and solid waste delivery. Our results show that privatization is less common for water, which has higher transaction costs. Furthermore, we find that municipalities with a conservative ruling party privatize more often regardless of the ideological orientation of the constituency. Finally, we find that intermunicipal cooperation may be a suitable organizational form for some municipalities.