Public–private partnerships and government spending limits

Public-Private Partnerships and Government Spending Limits

We consider public-private partnerships, in which a public official selects a project that is then developed and operated by a private contractor. We derive optimal public accounting rules when the official's choice among projects is biased by ideology or social ties or because of pandering to special interests. We give particular emphasis to how the rules should constrain the official’s incent...

Risk allocation and the costs and benefits of publicprivate partnerships

We study the agency costs of delegated public service provision, focusing on the link between organizational forms and uncertainty at project implementation. We consider a dynamic multitask moral hazard environment where the mapping between effort and performance is ex ante uncertain but new information may arise during operations. Our analysis highlights the costs and benefits that bundling pl...

Government Spending and Growth

What Limits Social Spending?

The forces that are most likely to set the ultimate limits on social spending as a share of GDP are not those usually imagined. The deadweight costs of such spending, and the taxes behind them, fail to show the predicted upward spiral. The experience of 1960–1981 shows a major role for shifts in relative age-group sizes, but with an approaching sunset to the effect of aging on social-spending p...

Term Limits , Seniority , and Government Spending : Theory and Evidence from the U . S . States ∗

What is a fiscal consequence of legislative term limits? We develop a legislative bargaining model that predicts a u-shaped relationship between the level of seniority within a legislature and government spending. The size of government spending decreases as the level of seniority increases from low tomoderate, while it increases as the level of seniority increases from moderate to high. The mo...