Public versus Private Provision of Public Services Philip
Public versus Private Provision of Public Services Philip Gray PSAS Presentation to Poverty Day October 17 th 2002
Introduction ¬Public Services and their role in poverty reduction ¬‘versus’ is a misnomer – public and private play complementary roles ¬Policy, regulation and financing roles of public sector ¬Residual role for public sector service provision?
Public Services and Poverty Reduction ¬ Infrastructure - Voices of the Poor, “The lack of basic infrastructure – particularly roads, transportation and water – is seen by the poor as a defining characteristic of poverty” (Narayan, 2000) ¬ Health-care – Public health a key determinant of economic growth ¬ Education – development of human capital and essential pre-requisite for operation in modern economy and society
Complexities ¬Different forms of private participation – service contracts to concessions to sales ¬Liberalization of service provision ¬Financing issues – subsidies, user fees, insurance ¬Externalities and public goods
Roles of Public Sector Policy – setting rules Financing – covering externalities and affordability Service Provision Regulation – Monitoring, Enforcing and Updating rules
Roles of Public Sector Policy – setting rules Financing – covering externalities and affordability Regulation – Monitoring, Enforcing and Updating rules Service Provision
Failures everywhere – what to do? ¬ Market failures – externalities, public goods, information asymmetries – can be solved through mechanisms other than service provision ¬ Public failures – public service provision – poor incentives, soft budget constraints, corruption see Bureaucrats in Business Middle Ground – Better focus of public sector on policy, regulation and targetted subsidies
Examples ¬ ‘Contracting Out’ – Public sector financing of private provision – monopoly with better incentives and regulation (e. g. Cambodia health) ¬ ‘Vouchers’ – Public sector financing of private provision – liberalized sector (e. g. Chile) ¬ ‘Charter Schools’ – Public Provision with choice (e. g. DC education) ¬ Public financing of connections – OBA schemes, eg Peru telecoms, Guatemala power, Paraguay water
Cambodia Health Care
% of poor people sick in the last month using health facility
Change in key indicators
- Slides: 11