Oliver Hart has been jointly awarded the 2016 Nobel Prize in Economic Sciences with Bengt Holmström "for their contributions to contract theory". This column discusses his contributions, focusing particularly on incomplete contracts.
Maija Halonen-Akatwijuka, 29 October 2016
Paolo Manasse, 31 January 2014
Sales of state-owned assets have been proposed as a way for highly-indebted countries to ease the pain of fiscal consolidation. This column argues that, despite the potential merits of privatisation in terms of long-run efficiency, in practice it is unlikely to improve short-run fiscal solvency. Since governments rarely alienate control rights, the efficiency gains from privatisations are often small. Moreover, financial markets may not fully reflect these gains – particularly during a financial crisis. The implication is that the Troika policy of linking financial assistance to privatisations is inappropriate and self-defeating.
Alexis Maingard, Laura Recuero Virto, 16 September 2011
Is privatisation of infrastructure a cheap road to development? This column argues that policymakers should recognise that what works for some situations won’t work for all. When it comes to infrastructure, the column suggests that governments and international financial institutions should look beyond the private sector.
Fernando Borraz, Nicolás González-Pampillón, Marcelo Olarreaga, 16 July 2011
“Many of the wars of this century were about oil, but those of the next century will be over water”. So said Ismail Serageldin, a senior environmentalist at the World Bank, in an interview with Newsweek in 1995. This column explores whether nationalising the provision of water can help avoid the sort of desperation that might make this statement come true.
Ludger Woessmann, Martin West, 02 December 2010
Does private competition work in the schooling sector? This column presents evidence that countries with more privately operated schools perform substantially better on international tests of student achievement. To isolate the causal effect of private competition, the column focuses on variation in private school shares that has deep historical roots – Catholic opposition to state-run education systems in the 19th century.
Paul Grout, 19 June 2009
Paul Grout of the Centre for Market and Public Organisation (University of Bristol) talks to Romesh Vaitilingam about his report, Private Delivery of Public Services, which surveys the theory and evidence on three models of private sector involvement in the delivery of public services: privatisation; public-private partnerships; and not-for-profit organisations. The interview was recorded in Bristol in June 2009
John Earle, 07 March 2009
A controversial article recently published in the Lancet argues that mass privatisation is responsible for the increased mortality in post-communist societies during the 1990s. It suggests privatised firms cut employment, which hurt health and mortality. This column uses firm-level data to show that there is no evidence that privatisation systematically lowered firm-level employment.
Nauro Campos, Yuko Kinoshita, 24 March 2008
What policy reforms can emerging economies adopt to attract foreign investment? This column presents evidence that financial reforms may be the most important, even though foreign investors are not financially constrained.