Ownership versus Environment:  Why are Public Sector Firms Inefficient?

Bartel, Ann P.; Harrison, Ann

doi:10.3386/w7043

Cited by 20 publications

(12 citation statements)

References 13 publications

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“…In this respect, we find that the degree of competition is important for efficiency, but it does not allow us to ignore the role played by public ownership. Given the high degree of competition achieved in the manufacturing sector, our results contradict previous studies, such as Kay and Thompson (1986), Vickers and Yarrow (1988) and Bartel and Harrison (1999), that point out that, once a sufficient degree of competition has been achieved, ownership ceases to matter as a determinant of productivity.…”

Section: Discussionmentioning

confidence: 99%

The Impact of Public Ownership and Competition on Productivity

González-Páramo

Cos

2005

Kyklos

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Are private firms more efficient than public ones? Does privatisation improve performance? In order to answer these questions, it is necessary to disentangle the impact of ownership and competition upon business performance. This paper presents empirical evidence relating to the hypothesis that public ownership and competition are determinants of firms' productivity. It concludes that public ownership has a significant negative effect on productivity and also that privatisation has a positive impact on efficiency. Furthermore, increased competition is found to have a positive effect on productivity. These results are interpreted as confirming that privatisation is effective as a means of increasing firms' efficiency, at least in a non-regulated and relatively competitive sector, such as manufacturing. Copyright 2005 Blackwell Publishing Ltd..

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Section: Discussionmentioning

confidence: 99%

The Impact of Public Ownership and Competition on Productivity

González-Páramo

Cos

2005

Kyklos

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“…Budget constraints are said to be soft, i.e., not fixed, whenever an enterprise can be infused with additional capital when it is on the verge of failure (Maskin, 1999). Using this idea, Bartel and Harrison (1999) empirically demonstrate public sector enterprises, which face softer budget constraints than their private sector competitors, are more cost‐inefficient and argue the primary reason is because they are able to hire and retain unnecessary workers given their access to subsidized government loans. Thus, the alternative to the “husband your resource hypothesis” is that regulators with a dedicated funding system have access to funds, outside of direct oversight by the legislature, which allows them to continue spending even in times of shortfalls.…”

Section: Determinants Of Efficiencymentioning

confidence: 99%

The Allocation of Governmental Regulatory Authority: Federalism and the Case of Insurance Regulation

Grace

Phillips

2007

J of Risk & Insurance

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We investigate the incentives states have to provide insurance regulatory services in an efficient manner. Regulation of the insurance industry in the United States is unique, as it is conducted primarily at the state level whereas the majority of insurance sales are interstate. Consistent with predictions from the federalism literature, we find evidence of trans-state externalities, as states with small domestic insurance markets are less efficient producers of insurance regulation and appear to allow states that choose to expend the greatest resources to regulate for them. In addition, states with more profitable domestic insurers are shown to export greater levels of regulation, suggesting extraterritorial regulation may erect modest barriers to entry. We find evidence of increasing economies of scale in the production of insurance regulation after controlling for these regulatory externalities. Copyright The Journal of Risk and Insurance, 2007.

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“…11 Similarly, Bartel (1999) found that public-sector enterprises are inefficient because of soft loans. 12 For a discussion of productivity, see Law 2000.…”

Section: Studies In Economic Prosperity Numbermentioning

confidence: 99%

“…12 For a discussion of productivity, see Law 2000. 13 Bartel (1999) argues that public-sector enterprises that have been shielded from import competition are inferior performers. 14 Mueller found that the premium was highest for federal employees followed by local and provincial government employees.…”

Section: Studies In Economic Prosperity Numbermentioning

confidence: 99%

Quebec prosperity

McMahon¹

2003

Classiques Des Sciences Sociales.

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The Fraser InstituteCette étude se termine par des recommandations politiques qui pourraient engendrer un Québec plus prospère. Rendement économiqueLe Québec possède d'immenses avenues de développe-ment économique. Il jouit de caractéristiques qui devraient, d'ordinaire, mener à un niveau exceptionnel de prospérité : situation centrale dans le marché le plus dynamique du monde, urbanisation, densité de la population et accès aux voies de transport, notamment une des plus grandes au monde, la Voie maritime du Saint-Laurent, qui rejoint le système des Grands Lacs.Ces derniers quarante ans, et quel que soit le point de vue, le bilan économique du Québec a déçu.

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Ownership versus Environment: Why are Public Sector Firms Inefficient?

Cited by 20 publications

References 13 publications

The Impact of Public Ownership and Competition on Productivity

The Impact of Public Ownership and Competition on Productivity

The Allocation of Governmental Regulatory Authority: Federalism and the Case of Insurance Regulation

Quebec prosperity

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