Working paper 03/061 - Abstract

Incomplete Contracts and Public Ownership: Remarks, and an Application to Public-Private Partnerships (PDF, file 42.9 KB) (PDF, 42kB)

Oliver Hart

The question of what should determine the boundaries between public and private firms in an advanced capitalist economy is a highly topical one. In this paper I discuss some recent theoretical thinking on this issue. I divide the paper into two parts. First, I make some general remarks about the relationship between the theoretical literature of privatization and incomplete contracting theories of the firm. Second, I use some of the ideas from this literature to develop a very preliminary model of public-private partnerships.

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