Arm’s Length Provision of Public Services

We analyze the economic consequences of strategic delegation of the right to decide between public or private provision of governmental service and/or the authority to negotiate and renegotiate with the chosen service provider. Our model encompass both bureaucratic delegation from a government to a privatization agency and electoral delegation from voters to a government. We identify two powerfull effects of delegation when contracts are incomplete: The incentive effect increases the incentive part of service providers’ remuneration and we show that strategic delegation may substitute formal incentive contracts. The bargaining effect improves the bargaining position vis a vis a private firm with market power and leads to a lower price for the service.outsourcing, strategic delegation, incentives, incomplete contracting, market power, representative democracy

Collective action problems in the contracting of public services: Evidence from the UK’s Ministry of Justice

In this paper, we examine collective action problems in the UK government in the process of contracting public services to the private sector. In particular, we examine the Ministry of Justice (MoJ) and its evolution in contract monitoring as part of a larger effort of the government to join up departments in contract management. By analyzing MoJ’s management of the electronic tagging contract with G4S and Serco, we show that a lack of coordination within the department and with other departments was a major reason for the overbilling by the two companies. Recent efforts to join up contract management efforts throughout government show promise in rectifying these contracting issues

Move Closer! New Modes of Governance and Accession to the European Union

This paper focuses on new modes of governance in the EU’s attempts to impact upon states, which are not (yet) members and which have become members in the 1980s. More specifically, I seek to explore the role of new modes of governance for the implementation of EU policies and EU primary Law in different types of states, “weak states” in particular, including Southern European member states, CEE candidate countries and associated states in the former Soviet Union and Northern Africa. To what extent have new modes of governance helped weak states that lack sufficient capacities to adopt and implement domestic reforms to comply with EU norms and rule cope with the challenge of accession and approximation to the EU?governance; implementation; European law; Nation-state; Nation-state; governance; treaty reform; political science

Supply Chains and Porous Boundaries: The Disaggregation of Legal Services

The economic downturn has had significant effects on law firms, and is causing many of them to rethink some basic assumptions about how they operate. In important respects, however, the downturn has simply intensified the effects of some deeper trends that preceded it, which are likely to continue after any recovery that may occur. This paper explores one of these trends, which is corporate client insistence that law firms “disaggregate” their services into discrete tasks that can be delegated to the least costly providers who can perform them. With advances in communications technology, there is increasing likelihood that some of these persons may be located outside the formal boundaries of the firm. This means that law firms may need increasingly to confront the make or buy decision that their corporate clients have regularly confronted for some time. The potential for vertical disintegration is a relatively recent development for legal services, but is well-established in other sectors of the global economy. Empirical work in several disciplines has identified a number of issues that arise for organizations as the make or buy decision becomes a potentially more salient feature of their operations. Much of this work has focused in particular on the implications of relying on outsourcing as an integral part of the production process. This paper discusses research on: (1) the challenges of ensuring that work performed outside the firm is fully integrated into the production process; (2) coordinating projects for which networks of organizations are responsible; (3) managing the transfer of knowledge inside and outside of firms that are participants in a supply chain; and (4) addressing the impact of using contingent workers on an organization’s workforce, structure, and culture. A review of this research suggests considerations that law firms will need to assess if they begin significantly to extend the process of providing services beyond their formal boundaries. Discussing the research also is intended to introduce concepts that may become increasingly relevant to law firms, but which currently are not commonly used to analyze their operations. Considering how these concepts are applicable to law firms may prompt us to rethink how to conceptualize these firms and what they do. This paper therefore is a preliminary attempt to explore: (1) the extent to which law firms may come to resemble the vertically disintegrated organizations that populate many other economic sectors and (2) the potential implications of this trend for the provision of legal services,the trajectory of legal careers, and lawyers’ sense of themselves as members of a distinct profession

Contracting out publicness: The private management of the urban public realm and its implications

In the UK, there has been a noticeable increase in public space management arrangements based on transfer and contracting-out of managerial responsibilities to organisations outside the public sector, whether in the shape of community or private trusts, tenants organisations, Business Improvement Districts, private companies or voluntary sector organisations. Recent cuts in local authority budgets have accelerated this process. Underpinning it there is an underlying assumption that publicness, however defined, can be guaranteed by means other than public ownership, funding and management, and that public sector ownership and direct control might not be in themselves essential features of spaces that are public. This paper reports on a case study research tries that investigates the impact on public spaces of the transfer of management away from the public sector. Based on nine case studies of public spaces in London under a variety of different management arrangements, the paper discusses how publicness is affected by the various contractual forms of transfer and what the main implications of this process are for different stakeholders and for the public realm as a whole. The paper suggests that contracted-out management of public space might not necessarily affect publicness negatively. However, it requires judiciously designed accountability mechanisms and clear decisions by all key stakeholders, including local authorities, about whose aspirations will be privileged and how other aspirations should be protected. In a climate of austerity and spending cuts, this requires a different kind of public management and of policy

Analysis of the Head of the Contracting Activity (HCA) oversight responsibilities within the Naval Supply System Command (NAVSUP)

Joint Applied ProjectThe purpose of this paper is to evaluate the Head of the Contracting (HCA) oversight responsibilities within the Naval Supply Systems Command (NAVSUP). Statutes as implemented by the Federal Acquisition Regulation (FAR) (and lower level regulations) mandate the oversight responsibilities of the HCA. This responsibility is further delegated in NAVSUP instructions and policy and other higher-level policy. The objective of this paper is to establish a single source that identifies the regulations, instructions, policies, etc. that promulgate the HCA oversight responsibility within NAVSUP. The end result of the paper is to analyze the challenges associated with implementing the HCA oversight function, whether this oversight is being performed in the required manner, and whether it is delegated to the appropriate level.http://archive.org/details/analysisofheadof1094510005Approved for public release; distribution is unlimited

Network Regulation under Climate Policy Review

Climate change policy, in particular in Europe, will a¤ect the energy sector through the exposure to massive penetration of distributed energy resources or decentralized generation into electricity distribution and transmission grids. As the prerequisites for infrastructure regulation still prevail in the future, the question arises whether the current regulatory model is still valid. In this paper, we chararcterize some of the e¤ects of climate change policy on the network tasks, assets and costs and contrast this with the assumptions implicit or explicit in current economic network regulation. The resulting challenge is identi ed as the change in the direction of higher asymmetry of information and higher capital intensity, combined with ambiguities in terms of task separation. Methodolog- ically, we argue that this may require a mobilization of the litterature related to delegated and hierarchical systems, e.g. team performance, as the externalities are joint products from multiple independent stages where individual regulation may introduce distortions. To provide guidance, we present a model of investment provision under regulation between a distribution system operator (DSO) and a potential investor-generation. The results from the model con rm the hypothesis that network regulation should nd a focal point, should integrate externalities in the performance assessment and should avoid wide delegation of contracting-billing for climate change technologies.network regulation; climate change; investments; distributed generation

Democratic Accountability: The Third Sector and All

The state, the market and the voluntary non-profit sectors can be seen as each being characterized by a distinctive accountability regime. Those regimes focus on different subjects of accountability (actions, results and intentions, respectively) and on different mechanisms of accountability (hierarchy, competition and cooperative networking, respectively). Different regimes can complement one another, enhancing the democratic accountability of the system overall. They can also undercut one another, if their differences are not respected. Bringing the Third Sector under a market-style accountability regime, through 'public-private partnerships' based on competitive tendering, undermines the distinctive contribution that the Third Sector might make. This publication is Hauser Center Working Paper No. 19.The Hauser Center Working Paper Series was launched during the summer of 2000. The Series enables the Hauser Center to share with a broad audience important works-in-progress written by Hauser Center scholars and researchers