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 language | English |
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Pages (from-to) | 1057-1075 |
Number of pages | 19 |
Journal | Cambridge Journal of Economics |
Volume | 37 |
Issue number | 5 |
Early online date | 9 May 2013 |
DOIs | |
Publication status | Published - 30 Aug 2013 |
Keywords
- incomplete contracts, privatisation, public services, water sector, Ghana