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Many would argue that the government is less efficient at providing various goods. Where I live in Australia, for instance, public schools and hospitals are gen

Many would argue that the government is less efficient at providing various goods. Where I live in Australia, for instance, public schools and hospitals are generally regarded as being inferior to privately run ones. In such circumstances it is more efficient for the government to give poor/unemployed people money to purchase these things on the private market. When the government has a monopoly on providing a service, they face no competition, which reduces their incentive to provide a quality service. Some services however, such as roads, are seen as natural monopolies, meaning even if privately owned they would still be a monopoly. In such cases people look more favourably upon government ownership as a government monopoly is seen as superior to a private monopoly.

Scoundreller 12y ago
Do the private hospitals and schools actually have better outcomes, after controlling for the initially better socioeconomic status of their users? I'm sure if you do a survey, the private organizations come out ahead, but people will recognize and give good ratings to a nicer looking building with prettier people running it, even if the results are poor, as long as they aren't drastically poor. But yes, for many things, giving people cash would be better than directly providing the service. Monopolies, price takers, perfect competition (and I think one other) are well identified in economics, but regulators still allow harmful monopolies left-and-right, while intervening in highly-competitive markets for seemingly no reason.
- logicchains 12y ago
  >Do the private hospitals and schools actually have better outcomes, after controlling for the initially better socioeconomic status of their users? Regarding private schools, I'm not sure; I imagine it's hard to study as there aren't many people of high socioeconomic status attending the 'worse' public schools, and not many poor people attending expensive private schools. There might be some data from countries like Sweden, where the government introduced a voucher system allowing parents to send their children to whatever kind of school they wanted and still get government support. Regarding public hospitals here, they do have awful outcomes in terms of waiting time compared to private hospitals. For instance, waiting over a year for a procedure that could be arranged in a few weeks at a private hospital. I'm not sure about other outcomes.

Scoundreller 12y ago

Do the private hospitals and schools actually have better outcomes, after controlling for the initially better socioeconomic status of their users? I'm sure if you do a survey, the private organizations come out ahead, but people will recognize and give good ratings to a nicer looking building with prettier people running it, even if the results are poor, as long as they aren't drastically poor. But yes, for many things, giving people cash would be better than directly providing the service. Monopolies, price takers, perfect competition (and I think one other) are well identified in economics, but regulators still allow harmful monopolies left-and-right, while intervening in highly-competitive markets for seemingly no reason.

logicchains 12y ago
>Do the private hospitals and schools actually have better outcomes, after controlling for the initially better socioeconomic status of their users? Regarding private schools, I'm not sure; I imagine it's hard to study as there aren't many people of high socioeconomic status attending the 'worse' public schools, and not many poor people attending expensive private schools. There might be some data from countries like Sweden, where the government introduced a voucher system allowing parents to send their children to whatever kind of school they wanted and still get government support. Regarding public hospitals here, they do have awful outcomes in terms of waiting time compared to private hospitals. For instance, waiting over a year for a procedure that could be arranged in a few weeks at a private hospital. I'm not sure about other outcomes.