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Contracting in local public organizations: the institutional economics perspective
Author(s) -
Hwang Kwangseon
Publication year - 2015
Publication title -
journal of public affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.221
H-Index - 20
eISSN - 1479-1854
pISSN - 1472-3891
DOI - 10.1002/pa.1509
Subject(s) - new institutional economics , transaction cost , agency (philosophy) , perspective (graphical) , information economics , economics , institutional economics , information asymmetry , public economics , institutional theory , public service , principal–agent problem , service (business) , microeconomics , public administration , neoclassical economics , finance , sociology , political science , management , economy , corporate governance , computer science , social science , artificial intelligence
The institutional economics is one of the approaches to explain the utility of contracting of local public service provision. This paper described and critiqued the assumptions underlying institutional economics as it is used in organization theories. It also explains whether and why these assumptions hold in public sector organizations. Finally, it discusses implications from the institutional economics approach for the local agency. Local agencies taking new institutional economics perspective as the basis for its contracting decisions should take transaction risks and information asymmetry into account. Copyright © 2014 John Wiley & Sons, Ltd.