19 octobre 2016 Providing Public Utilities in Common Agency Framework: Making, Buying and Level of Integration
Alexandre MAYOL, Benjamin MICHALET et Antoine PREVET
(Université Paris 1 Panthéon Sorbonne)
« Providing Public Utilities in Common Agency Framework: Making, Buying and Level of Integration »
Lieu: IAE de Paris – BioPark 8 bis, rue de La Croix Jarry 75013 Paris
Speaker : Alexandre Mayol (Université Paris 1 Panthéon Sorbonne)
Paper : « Providing Public Utilities in Common Agency Framework: Making, Buying and Level of Integration »
Abstract : Most of the literature on public procurement investigates private sector efficiency versus public management in a principal-agent setting. This paper disentangles the relationship between the organizational forms of the principal and public good delivery efficiency. We use a Principal-Agent model based on LEN-Model. We apply this framework to a common agency problem and derive three levels of integration : Low, Medium and High. We model two types of organization namely private and public. We compare the price of water between the different levels of integration and types of organization ; and we give a theoretical background to the Principal’s choice among them. Using data from 15000 French drinking water providers, we test these theoretical propositions by benchmarking the combinations between public/private and the three levels of integration. Our results suggest that the level of integration explains the largest variations in the prices. Such specification makes vanishing main theoretical and empirical results from previous literature: there is no difference between public/private providing in the lowest form of integration (municipal). When one considers the relative efficiency between public and private providing the middle form of integration is the less efficient.
Download the working paper