Privatization in the United States

RAND JOURNAL OF ECONOMICS, Vol. 28, No. 3, Autumn 1997

Posted: 29 Jul 1997

See all articles by Andrei Shleifer

Andrei Shleifer

Harvard University - Department of Economics; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)

Florencio Lopez de Silanes

SKEMA Business School; National Bureau of Economic Research (NBER)

Robert W. Vishny

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

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Abstract

In the United States, the two principal modes of producing local government services are in-house provision by government employees and contracting out to private suppliers, also known as privatization. We examine empirically how U.S. counties choose the mode of providing services. The evidence indicates that state clean-government laws and state laws restricting county spending encourage privatization, whereas strong public unions discourage it. This points to the important roles played by political patronage and taxpayer resistance to government spending in the privatization decision.

JEL Classification: H41, H72, H79, L33

Suggested Citation

Shleifer, Andrei and Lopez de Silanes, Florencio and Vishny, Robert W., Privatization in the United States. RAND JOURNAL OF ECONOMICS, Vol. 28, No. 3, Autumn 1997, Available at SSRN: https://ssrn.com/abstract=8751

Andrei Shleifer (Contact Author)

Harvard University - Department of Economics ( email )

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Florencio Lopez de Silanes

SKEMA Business School ( email )

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France

National Bureau of Economic Research (NBER)

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Robert W. Vishny

University of Chicago - Booth School of Business ( email )

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National Bureau of Economic Research (NBER)

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