Book contents
- The Right Privatization
- The Right Privatization
- Copyright page
- Dedication
- Epigraph
- Contents
- Figures
- Tables
- Acknowledgments
- Introduction
- Chapter 1 Public or Private?
- Chapter 2 The Effectiveness–Inclusion Framework
- Chapter 3 Public, Private, and Their Variations
- Chapter 4 Privatization Needs Capable Governments
- Chapter 5 Completing the Contracts
- Chapter 6 Private Investors in the Public Interest?
- Chapter 7 Public Promotion of Private Capabilities
- Chapter 8 A Roadmap to Privatization (and Its Alternatives)
- Book part
- Notes
- References
- Index
Chapter 5 - Completing the Contracts
Paying for Social Outcomes
Published online by Cambridge University Press: 31 March 2022
- The Right Privatization
- The Right Privatization
- Copyright page
- Dedication
- Epigraph
- Contents
- Figures
- Tables
- Acknowledgments
- Introduction
- Chapter 1 Public or Private?
- Chapter 2 The Effectiveness–Inclusion Framework
- Chapter 3 Public, Private, and Their Variations
- Chapter 4 Privatization Needs Capable Governments
- Chapter 5 Completing the Contracts
- Chapter 6 Private Investors in the Public Interest?
- Chapter 7 Public Promotion of Private Capabilities
- Chapter 8 A Roadmap to Privatization (and Its Alternatives)
- Book part
- Notes
- References
- Index
Summary
Previous chapters noted that a key source of hazard when profit-maximizing actors are involved in private services is the presence of social service attributes that are difficult to contract for. This chapter relaxes this assumption by examining a novel trend of measuring and contracting for social service attributes via outcome-based incentive contracts (such as social impact bonds). The chapter explores alternative contracting arrangements and outlines the perils of outcome-based contracting when outcomes are poorly measured, examining potential failures of measurement and potential remedies. The chapter also discusses the possibility of using outcome-based contracts as coordination devices alongside their more familiar objective of incentivizing superior service performance.
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- The Right PrivatizationWhy Private Firms in Public Initiatives Need Capable Governments, pp. 96 - 119Publisher: Cambridge University PressPrint publication year: 2022