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....

I develop a model of public sector contracting based on the multitask framework by Holmström and Milgrom (1991). In this model, an agent can put effort into increasing the quality of a service or reducing costs. Being residual claimants, private owners have stronger incentives to cut costs than...

Economic growth is below what would be needed to resume rapid convergence to average OECD living standards. On-going efforts to improve the business climate are laudable, but need to be widened and strengthened. Much progress has been achieved in reducing red tape, but it is only recently that...

This paper shows that the abolition of state guarantees to publicly owned banks in Germany resulted in an increase in refinancing costs at German savings banks. Rather than being the result of increased market discipline, the increase in refinancing costs is shown to be driven by spillover...

The dissemination of best practices has been a major tool for public sector reform in Asia. There are two reasons why it is an effective tool, especially for reforming public entities (PE) such as state-owned enterprises and government-funded organizations, which have more flexibility in their...

Reforming PEs is a critical component of public sector reform. In order to approach such an important task more systematically, we need to know how PEs reformed themselves during the past 5 years under President Roh. By examining a survey on 125 public entities' best practices, it is possible...

I develop a model of public sector contracting based on the multitask framework by Holmström and Milgrom (1991). In this model, an agent can put effort into increasing the quality of a service or reducing costs. Being residual claimants, private owners have stronger incentives to cut costs than...

Kautilya's Arthaśāstra, from the end of the fourth century BC, provides interesting insights into the problems of governance, accounting and control in the Mauryan society. This paper uses the extant English translations of Arthaśāstra to summarize the structure of the Mauryan economy,...

In an era of population aging and increasing fiscal pressures on nation-states, pension reserve funds have been mooted as effective investment vehicles for realizing future liabilities and achieving some balance between generations. Nonetheless, concerns have been raised that partisan political...

Public firms are public economic units that take location decisions or are involved in such decisions. There is a lack of location theories that consider this feature. The literature on public facility location theory mainly concerns location of real capital serving economic units. Attempts to...