'A brilliant critical and fresh look at the public choice school of thought.' - Paul Streeten This book challenges theories of public goods, public enterprise and public choice on three fronts. Government action reflects wider interests and commitments than just the material self-interest assumed as primary by the three theories. Government contributes to the productivity and quality of the modern mixed economy in ways not captured by theories stressing the inherent superiority of private markets. Lastly, old and new ideas within established traditions of political thought justify government action beyond the libertarian argument for limited government.

This book is the result of a program undertaken nine years ago by the Diebold Institute for Public Policy Studies, Inc., to identify and analyze potentials for private sector involvement in the delivery of public services. Since its founding in 1968, the Diebold Institute has focused on this question in the belief that private enterprise is capable of infusing public service delivery with the efficiency in resource allocation and management that is its hallmark, whether through direct involvement as a service provider or as a source of market dynamics and management techniques.

This volume addresses the need to revisit the very economic theories that in the past two decades have contributed so much to the development of a concentrated research agenda on nonprofit organizations. Long neglected as a topic of theorizing and empirical investigation by mainstream economics in particular, these initial theories of nonprofit organizations, introduced by Burton Weisbrod (see Chapter 3 by Kingma and Chapter 4 by Slivinsky) and Henry Hansmann (see Chapter 5 by Ortmann and Schlesinger and Chapter 6 by Hansmann) and others in the late 1970sand early 1980s, continue to shape theoretical and conceptual efforts. Importantly, their influence extends beyond economics and informs sociological and political science approaches to the set of organizations and institutions located between the market firm and the state agency as well (see Chapter 10 by Wolpert, Chapter 11 by Salamon, and Chapter 12 by Wolch; also Anheier & Ben-Ner, 1997; DiMaggio & Anheier, 1990). While the theoretical map of nonprofit research has expanded beyond these early attempts and now includes several other major theories such as stakeholder approaches (Chapter I by Ben-Ner and Gui, and Chapter 7 by Krashinsky), supply-side or entrepreneurial theories (Chapter 8 by Badelt and Chapter 9 by Young), institutional theories (Chapter 17 by DiMaggio), and comparative approaches (Chapter 15 by Anheier; see also Salamon & Anheier, 1998), we nonethelesssuggest that it is time to takestockand reexamine some of the very basics from which these economic theories operate. This is the main purpose ofthe book.

This book evaluates the validity of a key proposition of public choice theory: that competition is associated with superior performance by governmental organisations. Three forms of competition in local government are identified: competition between local authorities, competition between councils and private contractors, and competition between parties for political power. The extent and consequences of competition are assessed in both the UK and USA. The analysis is used to draw conclusions on the effects of competition and the validity of public choice theory.

This publication addresses factors that promote or inhibit successful provision of the four key international public goods: financial stability, international trade regime, international diffusion of technological knowledge and global environment. Without these goods, developing countries are unable to compete, prosper or attract capital from abroad. The need for public goods provision is also recognized by the Millennium Development Goals, internationally agreed goals and targets for knowledge, health, governance and environmental public goods. The Report addresses the nature of required policies and institutions using the modern principles of collective action.

This book provides a novel account of the public goods dilemma. The author shows how the social contract, in its quest for fairness, actually helps to breed the parasitic 'free riding' it is meant to suppress. He also shows how, in the absence of taxation, many public goods would be provided by spontaneous group co-operation. This would, however, imply some degree of free riding. Unwilling to tolerate such unfairness, co-operating groups would eventually drift from voluntary to compulsory solutions, heedless of the fact that this must bring back free riding with a vengeance. The author argues that the perverse incentives created by the attempt to render public provision assured and fair are a principal cause of the poor functioning of organised society.