State versus Private Ownership
Andrei Shleifer
Department of Economics
Harvard University遗失的世界第一部
Cambridge, Massachutts.
Abstract
Private ownership should generally be preferred to public ownership when the incentives to innovate and to contain costs must be strong. In esnce, this is the ca for capitalism over socialism, explaining the "dynamic vitality" of free enterpri. The great economists of the 1930s and 1940s failed to e the dangers of socialism in part becau they focud on the role of prices under socialism and capitalism, and ignored the enormous importance of ownership as the source of capitalist incentives to innovate. Moreover, many of the concerns that private firms fail to address “social goals” can be addresd through government contracting and regulation, without resort to government ownership. The ca for private provision only becomes stronger when competition between suppliers, reputationa
l mechanisms, the possibility of provision by private not-for-profit firms, as well as political patronage and corruption, are brought into play.
What kinds of goods and rvices should be provided by government employees as oppod to private firms? Should government workers make steel and cars in government-owned factories? Should teachers and doctors be publicly employed or should they work for private schools and practices? Should garbage be picked up by civil rvants or employees of private garbage haulers? Should the whole economy be "socialized"? Although the are age-old questions in economics, the answers economists give to them, as well as the reasons for arriving at the answers, have been changing. In this paper, I describe some recent ways of thinking about government ownership.
Half a century ago, economists were quick to favor government ownership of firms as soon as any market inequities or imperfections, such as monopoly power or externalities, were even suspected. Thus Arthur Lewis (1949, p. 101), concerned with monopoly power, advocated the nationalization of land, mineral deposits, telephone rvice, insurance, and the motor car industry. For similar reasons, James Meade (1948, p. 67) favored "socialization" of the iron and steel, as well as the chemical, industries. Maurice Allais (1947, p. 66), always a step ahead of his English-speaking peers, argued for nationalization of a few firms in each (!) industry to facilitate the comparison of publ
around是什么意思ic and private ownership. At that time, privatization of such rvices as incarceration and education was evidently not even discusd by rious scholars.
The comments by the future Nobel laureates were part of a broader debate over capitalism, socialism and the role of planning in a market economy, which raged in the 1930s and 1940s. The views of rious economists ranged from advocacy of socialism (Lange, 1936; Lerner, 1944), to fierce opposition to socialism (Hayek, 1944; Jewkes, 1948), to a reluctant
concession that socialism is bad but inevitable becau capitalism was running out of steam (Schumpeter, 1942). A remarkable aspect of this debate is that even many of the laisz-faire economists focud overwhelmingly on the goal of achieving competitive prices, even at the cost of accepting government ownership in non-competitive industries. Thus Henry Simons (1934, p.
51), in "A Positive Program for Laisz Faire," writes "The state should face the necessity of actually taking over, owning, and managing directly, both the railroads and the utilities, and all other industries in which it is impossible to maintain effectively competitive conditions." Simons's advice is partly a respon to the failures of regulation during the Depression, but the acquiescence of this libertarian economist to public ownership is symptomatic of the professional ntiment of the times.
Pigou (1938), Schumpeter (1942) and Robbins (1947) were not too oppod to state ownership either, although Pigou recognized most clearly the dangers of bureaucratic control. In the first edition of his Economics text, Samuleson (1948) was more skeptical of socialism, writing (p. 604): "It is only too easy to gloss over the tremendous dynamic vitality of our mixed free enterpri system, which, with all its faults, has given the world a century of progress such as an actual socialized order might find it impossible to equal." Even Samuelson, however, focus exclusively on the allocative role of prices, and does not say anything about ownership.
Consistent with the evident lack of aversion to state ownership, the postwar state assumed an enormous role in production throughout the world, owning everything from land and mines to industrial factories and communications to banks and insurance companies to hospitals and schools -- even in market economies! In some of the economies, such as Japan, the United States, and Germany, government ownership was restrained, while in others, such as Italy,videoengine log
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In the prewar and predepression years, economists were a good deal more skeptical about state ownership. A truly brilliant statement of this skepticism, to which I return below, is by Alfred Marshall (1907). France, and Austria, the state assumed control of significant parts of production. Most
government是什么意思developing countries opted for state ownership of the so-called "strategic" ctors. In socialist economies, the state came to own not just the strategic ctors, but everything el as well. How the world has changed! In the last 20 years, governments in market economies
throughout the world have privatized the very state firms in steel, energy, telecommunications and financial rvices that the Nobel laureates approvingly saw nationalized a few decades earlier. Communism has collapd almost everywhere in the world, and reform governments throughout the formerly socialist world have embarked on massive privatization programs. The economic policies of developing countries turned squarely to private ownership. In market economies,government provision of such basic rvices as garbage collection and education has come into question, and has increasingly been replaced with private provision, though still largely paid for from tax revenues.
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Although some early voices, most notably that of Milton Friedman (1962), did ri tobree
oppo state ownership, it is fair to say that post-war economists generally failed to anticipate its grotesque failure 1. In recent years, however, the evidence on the failures of state ownership in economies around the world has begun to accumulate (World Bank, 1995), and advances in the theories of ownership and contracting have reopened the question of state versus private
provision. The contracting perspective distinguishes sharply between the government paying for a particular rvice, such as education, and providing it inhou. This perspective also permits to identify the opportunities for achieving social goals through private supply by a firm that may
operate under a government contract or regulation. In a n, the issues here are cloly related to the vertical integration literature (Coa, 1937), except the question is that of the “make or buy” decision by the government rather than by a private firm.
When the opportunities for government contracting are exploited, the benefits of outright state ownership become elusive, even when social goals are taken into account. Moreover, it becomes clear that private ownership is the crucial source of incentives to innovate and become efficient, which accounts for what Samuelson (1948) called the "tremendous vitality" of the free enterpri system. The contractual perspective can rve as the basis of a theory of optimal provision when the government maximizes social welfare. It also allows us to think about an imperfect government, which maximizes political goals such as patronage or simply the income of politicians through bribes. Generally speaking, the ca against state ownership becomes stronger when political considerations enter the calculation.网上学韩语
This paper begins by evaluating the ca for in-hou provision of goods and rvices by employees of a benevolent government. It argues that the conditions under which government ownership is superior in a country with good contract enforcement are very limited, and involve particular cas where soft incentives are extremely valuable and competition is very limited. I then turn to the more realistic ca of a non-benevolent government, which helps to explain why the gains from privatization in many instances have been so enormous. Elementary and condary education offer a particularly vivid example where I believe the ca for near-monopoly government provision in an advanced democracy is indefensible.
The bottom line of this paper is simple. The 1940s ca that government production is broadly desirable is no longer convincing. This ca was motivated in part by such empirical
datatablesobrvations as some success of government control during the war, the failures of competition and regulation during the Great Depression, and the apparent success of Soviet industrialization, but also by a misunderstanding of the conquences of political control of firms, and by a substantial disregard of the importance of innovation in market economies. Today, the war and the Depression are no longer as vivid, and the communist economies have collapd. As importantly, the quality of contracting and regulation have improved, competition has become more effective, the dangers of p
oliticization of production have become lf-evident, and the appreciation of the innovative potential of entrepreneurial firms is at a new high. For all the reasons, the benefits of reducing the role of government as a producer are becoming apparent and beginning to be exploited.
The Desirable Scope of a Benevolent Government郑中基与蔡卓妍
Suppo that the government wants to have a good or rvice delivered to some consumers. The product can be food or shelter, steel or phone rvice, education, health care, or incarceration. The government might wish to pay for some of this good and rvice out of its budget, or it may have views on the characteristics of this good, such as the price, even though the consumers buy it on their own. Should the government hire its own employees to deliver the rvice, or should it relinquish the provision to a (possibly regulated) private supplier? Does the mode of provision matter even when the government pays? In this ction, I examine the questions for the ca of a benevolent government.
