Abstract
We analyze the economic consequences of strategic delegation of the right to decide between public or private provision of governmental service and/or the authority to negotiate and renegotiate with the chosen service provider. Our model encompass both bureaucratic delegation from a government to a privatization agency and electoral delegation from voters to a government. We identify two powerfull effects of delegation when contracts are incomplete: The incentive effect increases the incentive part of service providers' remuneration and we show that strategic delegation may substitute formal incentive contracts. The bargaining effect improves the bargaining position vis a vis a private firm with market power and leads to a lower price for the service
| Originalsprog | Engelsk |
|---|---|
| Udgiver | Centre for Industrial Economics, Department of Economics, University of Copenhagen |
| Antal sider | 44 |
| Status | Udgivet - 2007 |
Emneord
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