Incomplete Contracts and Public Ownership: Remarks, and an Application to Public-Private Partnerships
17 Pages Posted: 12 Jun 2003
Date Written: July 2002
The question of what should determine the boundaries between public and private firms in an advanced capitalist economy is a highly topical one. In this paper I will try to summarize some recent theoretical thinking on this issue. I will divide the paper into two parts. First, I will make some general remarks about the relationship between the theoretical literature on privatization and incomplete contracting theories of the firm. Second, I will use some of the ideas from this literature to develop a very preliminary model of public-private partnerships.
Keywords: public-private partnerships, ownership, incomplete contracts
JEL Classification: D23, H1, H4
Suggested Citation: Suggested Citation