Formal model of outsoursing of public services Cover Image

Формален модел на аутосорсинга на публичните услуги
Formal model of outsoursing of public services

Author(s): Latchezar Tomov, Victor Avramov
Subject(s): Politics / Political Sciences, Social Sciences, Education, Civil Society, Public Administration, Higher Education
Published by: Нов български университет
Keywords: Outsourcing; Public Services; Market Supply; Limited Information; Quality of Public Service Provision

Summary/Abstract: We adapt a principal-agent model that argues about the theoretical advantages of outsourcing public services. By ‘outsourcing’ we understand the private provision of public services. With limited information on the quality of the provision, monopoly and divergent prices, the client (the principal) will prefer the lower price. With market supply, there emerge price discrimination and market segmentation, which is better in terms of overall wellfare. We discuss the issue of quality in the provision of public services.

  • Issue Year: 3/2018
  • Issue No: 1
  • Page Range: 194-206
  • Page Count: 12
  • Language: Bulgarian