Abstract
In many countries, public agencies or private firms are gradually moving away from being exclusive providers of goods and services that traditionally were assigned to the state or markets, respectively. Instead, state agencies, both at the national and the local level, and private organizations, both for-profit firms and nongovernment organizations (NGOs), increasingly coordinate, collaborate, or partner to finance, produce, or provide public services. This paper attempts to identify the factors that account for the successes or failures of such public-private service delivery arrangements, with a focus on the role of monetary and nonmonetary incentives used in selected case studies in developing Asia. It finds that such arrangements are a viable service delivery mechanism where there is a state or market failure. While governments now increasingly enter into such partnerships, they appear to do so more with for-profit firms than with NGOs. A key lesson is to mobilize potential private sector partners, match the partner’s mission with the appropriate type or level of service provision, and then motivate them with the right incentives but also monitor them for performance accordingly.
Highlights
In many countries, public agencies or private firms are gradually moving away from being exclusive providers of goods and services that traditionally were assigned to the state or markets, respectively
A partnership between a state agency and private organization may be limited to the provision of market-augmenting public goods, while the state may remain the sole provider of marketsupporting public goods
The intervention led to reductions in private health expenditures. These results indicate that there is room for experimenting with various incentive schemes even if private sector partners are already appropriately matched with the type of public service to be delivered
Summary
Public agencies or private firms are gradually moving away from being exclusive providers of goods and services that traditionally were assigned to the state or markets, respectively. State agencies and private organizations increasingly coordinate, collaborate, or partner up to finance, produce, or provide public services. The state agencies involved include the regular line departments, their bureaus, or attached units Their private sector partners include for-profit firms, faith-based organizations, nongovernment organizations (NGOs), foundations, professional groups, community-based associations, and other volunteer groups. 1 While in these particular undertakings the private sector partners are mostly firms (or consortium of firms), in some instances, nonprofit, voluntary associations are engaged instead, albeit mostly in the provision of social services such as health, education, livelihood, or employment. According to the World Bank (2006), in Bangladesh alone, as of end of 2006, there were already around 2,000 NGOs in operation Most of these NGOs provide microcredit, health, sanitation, and education services. In the Philippines, there are as of the end of August 2013 already around 10,000 nonstock, nonprofit organizations, including NGOs and private foundations, registered with the Securities and Exchange
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
