Public Decision-Making Processes and Asymmetry of Information

1. Front Matter

   Pages i-xv

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2. Introduction

   1. The Economics of Information and Public Policy

      • Jean-Jacques Laffont

      Pages 1-13

3. Theory

   1. Front Matter

      Pages 15-15

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   2. Industrial Policy, Optimal Majorities and How These Can Prevent Capture

      • Massimo Marrelli, Francesca Stroffolini

      Pages 17-35

   3. On the Role of Lobbies in Policy Making

      • Isidoro Mazza

      Pages 37-66

   4. Delegated Control of Incentives in Regulated Industries

      • Fabrizia Lapecorella

      Pages 67-87

   5. Firms, Unions and Regulators

      • Giacomo Pignataro

      Pages 89-107

4. Applications

   1. Front Matter

      Pages 109-109

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   2. Implementation Practices in Regulation

      • Michael Waterson, Maria Vagliasindi

      Pages 111-146

   3. Public Procurement in the EU

      • Ilde Rizzo

      Pages 147-164

   4. Agency and Health Care

      • Andrew Jones, Roberto Zanola

      Pages 165-188

   5. Incentive Failure and The Market for Information Goods

      • Michele Trimarchi

      Pages 189-202

5. Back Matter

   Pages 203-206

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The problems arising from the existence of asymmetric information in public decision making have been widely explored by economists. Most of the traditional analysis of public sector activities has been reviewed to take accountofthe possible distortions arising from an asymmetric distribution of relevant information among the actors of the public decision-making process. A normative approach has been developed to design incentive schemes which tackle adverse selection and moral hazard problems within public organisations: our understanding of these problems is now much better, and some of the mechanisms designed have had important practical implications. While this analysis is still under way in many fields of public economics, as the papers by Jones and Zanola, and Trimarchi witness, a debate is ongoing on the possible theoretical limitations ofthis approach and on its actual relevance for public sector activities. This book encompasses different contributions to these issues, on both theoretical and practical areas, which were firstly presented at a conference in Catania. The innermost problem in the current discussion arises from the fact that this normative analysis is firmly rooted in the complete contracting framework, with the consequence that, despite the analytical complexities of most models, their results rely on very simplified assumptions. Most complexities of the organisation of public sector, and more generally, of writing "contracts", are therefore swept away.

• Non-governmental organizations (NGOs)
• calculus
• organizations
• regulation
• sets

• University of Naples, Italy

  Massimo Marrelli

• University of Catania, Italy

  Giacomo Pignataro

Policies and ethics