Efficient Local Government Service Provision: The Role of Privatization and Public Sector Unions /
Jerch, Rhiannon.
Efficient Local Government Service Provision: The Role of Privatization and Public Sector Unions / Rhiannon Jerch, Matthew E. Kahn, Shanjun Li. - Cambridge, Mass. National Bureau of Economic Research 2016. - 1 online resource: illustrations (black and white); - NBER working paper series no. w22088 . - Working Paper Series (National Bureau of Economic Research) no. w22088. .
March 2016.
Local governments spend roughly $1.6 trillion per year to provide a variety of public services ranging from police and fire protection to public schools and public transit. However, we know little about public sector's productivity in delivering key services. To understand the productivity both over time and across space, we examine public bus service, which represents a standardized output for benchmarking the cost of local government service provision. There is significant dispersion across transit agencies in the operating cost per bus mile with the highest being more than three times as high as the lowest among top 20 largest cities by population. We estimate the cost savings from privatization and explore the political economy of why privatization rates are lower in high cost unionized areas. Our analysis finds that the full privatizaton could result in cost savings of $5.7 billion in 2011 and that the gain in economic efficiency from more closely aligning bus fares with production costs would be worth at least half a billion dollars.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.
Efficient Local Government Service Provision: The Role of Privatization and Public Sector Unions / Rhiannon Jerch, Matthew E. Kahn, Shanjun Li. - Cambridge, Mass. National Bureau of Economic Research 2016. - 1 online resource: illustrations (black and white); - NBER working paper series no. w22088 . - Working Paper Series (National Bureau of Economic Research) no. w22088. .
March 2016.
Local governments spend roughly $1.6 trillion per year to provide a variety of public services ranging from police and fire protection to public schools and public transit. However, we know little about public sector's productivity in delivering key services. To understand the productivity both over time and across space, we examine public bus service, which represents a standardized output for benchmarking the cost of local government service provision. There is significant dispersion across transit agencies in the operating cost per bus mile with the highest being more than three times as high as the lowest among top 20 largest cities by population. We estimate the cost savings from privatization and explore the political economy of why privatization rates are lower in high cost unionized areas. Our analysis finds that the full privatizaton could result in cost savings of $5.7 billion in 2011 and that the gain in economic efficiency from more closely aligning bus fares with production costs would be worth at least half a billion dollars.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.