A critical asssessment of incomplete contracts theory for private participation in public services: The case of water sector in Ghana

Hulya Dagdeviren, Simon A. Robertson

Research output: Contribution to journalArticlepeer-review

12 Citations (Scopus)
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Abstract

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.
Original languageEnglish
Pages (from-to)1057-1075
Number of pages19
JournalCambridge Journal of Economics
Volume37
Issue number5
Early online date9 May 2013
DOIs
Publication statusPublished - 30 Aug 2013

Keywords

  • incomplete contracts, privatisation, public services, water sector, Ghana

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