What Does Privatisation Achieve?—A Comment on Quiggin

Abstract John Quiggin's ‘Does Privatisation Pay?’ is critically assessed in this short article. The following issues are specifically addressed: un-derpricing, sovereign risk, the equity premium, fiscal illusion, welfare considerations, and the efficiency of private and public enterprises. The article concludes that privatisation need not be a poor economic bargain for the community and that it ought to be considered on a case-by-case basis.     

An Ordered-Probit Analysis of Price and Performance in Competitively Tendered Contracts

Abstract
This article adopts an ordered-probit estimation procedure to investigate the influence of competitive tendering on contract price and performance. Using a two-equation recursive system the findings of Domberger, Hall and Li (1995) turned out to be robust to the ordered-probit methodology which confirmed the strong negative effect of competitive tendering on contract price. The evidence also suggested that performance was either enhanced or remained the same in the presence of competition. Overall, the results of this investigation support the view that competitive tendering generates efficiency gains without adverse effects on quality of service .     

Competitive Tendering and Contracting in the Public Sector: A Survey

This paper is a survey of the role and impact of competitive tendering and contracting (CTC) policies in the public sector. The paper examines the theoretical rationale for introducing competition in the provision of public services and the methodology by which contracting decisions are reached. It investigates the extent of implementation and nature of outcomes in several countries. A broad sweep of the empirical findings suggests that CTC generates substantial cost savings. Lack of adequate data makes an assessment of the effect on quality more troublesome, and further research is needed     

Public-Private Partnerships for Service Delivery

This article reports on the performance of services contracted out by the public sector to private sector organisations. The conclusions are based on probably the biggest-ever questionnaire survey on this topic to-date: it covered 7,500 public-private partnerships, and was replicated annually over three years. The private sector organisations providing the services included multinationals like IBM and Andersen Consulting as well as local firms. The public sector "clients" were all from three Australian states or the Australian federal government. The study not only shows that these partnerships are set to go on expanding fast, but also explores the ways in which they have been successful and the pitfalls which the partners need to avoid.     

Contracting out by the public sector: theory, evidence, prospects

Unlike privatization, contracting out (or simply 'contracting')does not generally involve the sale of publicly owned assets.Yet it has been widely used as a mechanism for reform of public-sectorservice provision. Contracting introduces ex-ante competition-competitionfor the market through competitive tendering. This article examinesboth the theory and evidence of contracting by the public sector.It considers the theoretical conditions, such as contractualincompleteness and the ownership pf physical assets, which mayimpede efficient contracting. It also reviews the internationalevidence which suggests that savings in the order of 20 percent are achievable, without sacrificing the quality of serviceprovided. In the UK, savings of between £240m and £280mhave been estimated for contracts let at the central governmentlevel. Substantial savings have also been generated by contractingat the local government level.     

Private and public sector regulation of competitively tendered contracts

This paper addresses two contractual issues using a sample of competitively tendered contracts for cleaning services. First, the paper considers the characteristics that distinguish private from public sector organisations in their methods of selection and regulation of contractors. Secondly, the paper examines the perceived effectiveness of such regulatory mechanisms in terms of compliance with contract specifications and overall assessment of quality. Econometric analysis reveals that private sector organisations differ from their public sector counterparts in the selection procedures of contractors. Moreover, significant differences emerge in the apparent efficacy of a range of regulatory instruments in assuring contractual performance.We are grateful to Jörg Finsinger and participants at the Industrial Organization Conference in Vienna (1992) for helpful comments. The usual disclaimer applies.