TY  - BOOK
AU  - Hart,Oliver
AU  - Shleifer,Andrei
AU  - Vishny,Robert W.
ED  - National Bureau of Economic Research.
TI  - The Proper Scope of Government: Theory and an Application to Prisons 
T2  - NBER working paper series
PY  - 1996///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - September 1996; Hardcopy version available to institutional subscribers
N2  - When should a government provide a service inhouse and when should it contract out provision?  We develop a model in which the provider can invest in improving the quality of service or reducing cost.  If contracts are incomplete, the private provider has a stronger incentive to engage in both quality improvement and cost reduction than a government employee.  However, the private contractor's incentive to engage in cost reduction is typically too strong because he ignores the adverse effect on non-contractible quality.  The model is applied to understanding the costs and benefits of prison privatization
UR  - https://www.nber.org/papers/w5744
UR  - http://dx.doi.org/10.3386/w5744
ER  -