University of Hertfordshire

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  • 906510

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Original languageEnglish
Number of pages19
Pages (from-to)1057-1075
JournalCambridge Journal of Economics
Journal publication date30 Aug 2013
Early online date9 May 2013
Publication statusPublished - 30 Aug 2013


This paper provides a critical analysis of the recent developments in the incomplete contracts theory and its conclusions for privatisation of public services. Drawing upon a case study of management contract for urban water services in Ghana and highlighting the flaws in the theory, the paper argues that contractual incompleteness does not provide a uniform guidance on efficient forms of ownership for public services. We argue that methodological individualism utilised in the theory is particularly ineffective for its application to public services where direct or indirect contractual role of the state cannot be eliminated. The sterility of the theory with respect to political, institutional and distributional context of public service delivery is identified as an important weakness.

ID: 1285170