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Organizing Public Good Provision: Lessons from Managerial Accounting

Universitat Pompeu Fabra, Economics and Business Working Paper Series 1445

24 Pages Posted: 3 Apr 2015  

Benito Arruñada

Pompeu Fabra University

Stephen Hansen

Universitat Pompeu Fabra

Date Written: October 1, 2014

Abstract

This paper applies ideas and findings from Managerial Accounting to the problem of public good provision. It first links the problems of traditional bureaucracies with those of “discretionary expense centers”, which are characterized by poor user and supplier incentives as well as overproduction. It then describes alternative hybrid organizations that delegate authority and provide incentives on some dimensions, while maintaining control on others. Finally, it illustrates the ideas with several cross-country case studies on public registries, illustrating that such hybrids may provide a superior, if imperfect, solution to the problems that governments face when lacking sufficient information to directly control the activities of public goods’ providers.

Keywords: Public Good Provision, Managerial Accounting

JEL Classification: H40, M48

Suggested Citation

Arruñada, Benito and Hansen, Stephen, Organizing Public Good Provision: Lessons from Managerial Accounting (October 1, 2014). Universitat Pompeu Fabra, Economics and Business Working Paper Series 1445. Available at SSRN: https://ssrn.com/abstract=2535961 or http://dx.doi.org/10.2139/ssrn.2535961

Benito Arruñada (Contact Author)

Pompeu Fabra University ( email )

Ramon Trias Fargas 25-27
Department of Economics and Business
Barcelona, 08005
Spain
+34 93 542 25 72 (Phone)
+34 93 542 17 46 (Fax)

HOME PAGE: http://www.econ.upf.edu/~arrunada

Stephen Hansen

Universitat Pompeu Fabra ( email )

Ramon Trias Fargas, 25-27
Barcelona, E-08005
Spain

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