This paper analyzes public sector contracting of credence goods, i.e., services for which the producer has private information whether a certain treatment is needed or not. I develop a model where a credence good is supplied by an agent who can invest in quality and exert effort to reduce costs....

There are several theoretical accounts of public sector outsourcing. We note that leading theories give different predictions of the influence of political variables and test the predictions on a Swedish data set in which outsourcing varies between municipalities and over time as well as between...

We test whether generosity is related to political preferences and partisanship in Canada, Sweden, the United Kingdom and the United States using incentivized dictator games. The total sample consists of more than 5,000 respondents. We document that support for social spending and redistribution...

Sweden has a school voucher system with universal coverage and full acceptance of corporate providers. Using a value added approach, we find that students at upper-secondary voucher schools on average score 0.06 standard deviations lower on externally graded standardized tests in first year core...

Institutional and political characteristics affect the extent to which the real exchange rates of oil-exporting countries co-move with the oil price. In a simple theoretical model, good governance insulates real exchange rates from price volatility by generating a smoother pattern of fiscal...

I construct a model of public policy development, and use the model to explain why the United States has a comparatively small public sector, but instead a large "private welfare state" with employment-based benefits. The key factors are politically organized firms and labor unions. These...

In this paper we present survey evidence suggesting that there exists a sizeable fiscal illusion amongst the general public in Sweden. Respondents in a nation-wide and representative survey systematically underestimate the share of an ordinary worker’s income that is transferred to the public...

This paper presents a detailed analysis of voters‟ responses to municipality and regional-level unemployment and economic growth, using panel data on 284 municipalities and 9 regions, covering Swedish general elections from 1982 to 2002. The preferred specification suggests that a reduction in...

We survey the literature on the effects of public sector outsourcing. Guided by theory, we systematically arrange services according to the type and magnitude of their contractibility problems. Taken as a whole, the empirical literature indicates that public sector outsourcing generally reduces...

Welfare services are an important part of the Nordic welfare states both financially and for welfare state redistribution. Baumol's cost disease, Wagner's law, and population ageing are often said to bring challenges for the future provision of welfare services. While none of the three poses an...