Is privatization a panacea for LDCs? Market failure versus public sector failure

Jonas Prager

    Research output: Contribution to journalArticle

    Abstract

    The purpose is to analyze the issue of privatization from the viewpoint of efficiency. The paper begins in the following section with a brief analysis of market failure and other motives for government intervention in production. The next section places the blame for public sector inefficiency on the absence of efficiency-promoting incentives, with particular attention paid to; the presence of multiple and conflicting goals, the lack of management independence, an inappropriate reward structure, and incentives even encouraging inefficiency. The paper returns to the private sector in the ensuing section to demonstrate that such disincentives are less common there. The penultimate section of the paper explores some of the meanings of privatization, and examines three from an efficiency viewpoint under the following circumstances; when a private monopoly replaces a public monopoly, when privatization occurs in the context of competitive markets, and when the government privatizes the delivery of a service but retains ownership and direction. The concluding and summary section suggests that the answer to the question: "Is privatization a panacea?' must be an equivocal "maybe.' -from Author

    Original languageEnglish (US)
    Pages (from-to)301-321
    Number of pages21
    JournalJournal of Developing Areas
    Volume26
    Issue number3
    StatePublished - 1992

    Fingerprint

    market failure
    privatization
    public sector
    market
    monopoly
    efficiency
    incentive
    private sector
    ownership
    reward
    lack
    management

    ASJC Scopus subject areas

    • Geography, Planning and Development

    Cite this

    Is privatization a panacea for LDCs? Market failure versus public sector failure. / Prager, Jonas.

    In: Journal of Developing Areas, Vol. 26, No. 3, 1992, p. 301-321.

    Research output: Contribution to journalArticle

    @article{6f6f76e899b546e482538de2537d5484,
    title = "Is privatization a panacea for LDCs? Market failure versus public sector failure",
    abstract = "The purpose is to analyze the issue of privatization from the viewpoint of efficiency. The paper begins in the following section with a brief analysis of market failure and other motives for government intervention in production. The next section places the blame for public sector inefficiency on the absence of efficiency-promoting incentives, with particular attention paid to; the presence of multiple and conflicting goals, the lack of management independence, an inappropriate reward structure, and incentives even encouraging inefficiency. The paper returns to the private sector in the ensuing section to demonstrate that such disincentives are less common there. The penultimate section of the paper explores some of the meanings of privatization, and examines three from an efficiency viewpoint under the following circumstances; when a private monopoly replaces a public monopoly, when privatization occurs in the context of competitive markets, and when the government privatizes the delivery of a service but retains ownership and direction. The concluding and summary section suggests that the answer to the question: {"}Is privatization a panacea?' must be an equivocal {"}maybe.' -from Author",
    author = "Jonas Prager",
    year = "1992",
    language = "English (US)",
    volume = "26",
    pages = "301--321",
    journal = "Journal of Developing Areas",
    issn = "0022-037X",
    publisher = "Western Illinois University",
    number = "3",

    }

    TY - JOUR

    T1 - Is privatization a panacea for LDCs? Market failure versus public sector failure

    AU - Prager, Jonas

    PY - 1992

    Y1 - 1992

    N2 - The purpose is to analyze the issue of privatization from the viewpoint of efficiency. The paper begins in the following section with a brief analysis of market failure and other motives for government intervention in production. The next section places the blame for public sector inefficiency on the absence of efficiency-promoting incentives, with particular attention paid to; the presence of multiple and conflicting goals, the lack of management independence, an inappropriate reward structure, and incentives even encouraging inefficiency. The paper returns to the private sector in the ensuing section to demonstrate that such disincentives are less common there. The penultimate section of the paper explores some of the meanings of privatization, and examines three from an efficiency viewpoint under the following circumstances; when a private monopoly replaces a public monopoly, when privatization occurs in the context of competitive markets, and when the government privatizes the delivery of a service but retains ownership and direction. The concluding and summary section suggests that the answer to the question: "Is privatization a panacea?' must be an equivocal "maybe.' -from Author

    AB - The purpose is to analyze the issue of privatization from the viewpoint of efficiency. The paper begins in the following section with a brief analysis of market failure and other motives for government intervention in production. The next section places the blame for public sector inefficiency on the absence of efficiency-promoting incentives, with particular attention paid to; the presence of multiple and conflicting goals, the lack of management independence, an inappropriate reward structure, and incentives even encouraging inefficiency. The paper returns to the private sector in the ensuing section to demonstrate that such disincentives are less common there. The penultimate section of the paper explores some of the meanings of privatization, and examines three from an efficiency viewpoint under the following circumstances; when a private monopoly replaces a public monopoly, when privatization occurs in the context of competitive markets, and when the government privatizes the delivery of a service but retains ownership and direction. The concluding and summary section suggests that the answer to the question: "Is privatization a panacea?' must be an equivocal "maybe.' -from Author

    UR - http://www.scopus.com/inward/record.url?scp=0026488709&partnerID=8YFLogxK

    UR - http://www.scopus.com/inward/citedby.url?scp=0026488709&partnerID=8YFLogxK

    M3 - Article

    AN - SCOPUS:0026488709

    VL - 26

    SP - 301

    EP - 321

    JO - Journal of Developing Areas

    JF - Journal of Developing Areas

    SN - 0022-037X

    IS - 3

    ER -