Input Controls in the Public Sector: What Does Economic Theory Offer?

40 Pages Posted: 15 Feb 2006

See all articles by David L. Heymann

David L. Heymann

World Health Organization - Communicable Diseases

Date Written: July 8, 1988

Abstract

This paper reviews the economic literature on bureaucratic behavior, the theory of the firm, and agency theory and its application to the public sector, to determine whether any lessons can be drawn regarding how far governments should go in delegating control over inputs to public sector managers. Against a background survey of country practices, the paper concludes that input controls are one of a number of ways of dealing with the agency problem of trying to ensure that bureaucrats act in the interests of the government. Other methods can be, and have been, used for dealing with moral hazard-type agency problems, but features of current budgetary systems make it more difficult to deal with inputs that have implications for future resource use.

JEL Classification: 3226

Suggested Citation

Heymann, David L., Input Controls in the Public Sector: What Does Economic Theory Offer? (July 8, 1988). IMF Working Paper No. 88/59, Available at SSRN: https://ssrn.com/abstract=884873

David L. Heymann (Contact Author)

World Health Organization - Communicable Diseases ( email )

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Geneva 27, CH-1211
Switzerland

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