Premium
THE THEORY OF PUBLIC ENTERPRISE RECONSIDERED
Author(s) -
GARNER Maurice R.
Publication year - 1996
Publication title -
annals of public and cooperative economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.526
H-Index - 37
eISSN - 1467-8292
pISSN - 1370-4788
DOI - 10.1111/j.1467-8292.1996.tb01948.x
Subject(s) - public enterprise , corporate governance , business , government (linguistics) , principal–agent problem , agency (philosophy) , private enterprise , principal (computer security) , public administration , finance , political science , computer science , computer security , sociology , linguistics , philosophy , social science
** A comparison of the essential characteristics of public and private enterprise against the background of agency theory shows that archetypal public enterprise is not an enterprise in the generally accepted legal and economic senses of that expression. If it is to be efficient, therefore, archetypal public enterprise must not be left dependent upon governance and monitoring systems appropriate to private enterprise but must, by means of an intimate and cooperative (and not an ‘arm's length') relationship between the principal (government) and the agent (management), be provided with precisely defined and quantified objectives that lead to an agreed measure of overall performance. The essay's conclusions are important because, inter alia, they shift the efficiency debate from property to governance.