[PEN-L:2253] Shleifer and incentives; bounced from Peter D. boundary="------------68DD41AC4BDE59C6CC48104A"

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

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Peter Dorman wrote:

>
>
>   ------------------------------------------------------------------------
>
> Subject: Shleifer and incentives
> Date: Fri, 15 Jan 1999 13:12:03 -0800
> From: Peter Dorman <dormanp@xxxxxxxxxxxxxxxxxxx>
> Reply-To: pen-l@xxxxxxxxxxxxxxxx
> References: <001501be3fd1$f6c56940$3bf246d1@xxxxxxxxxxxxxxxx>
>
> I finally got around to reading Andrei Shleifer's rant against the
> public sector in the Fall 98 J of Econ Perspectives.  For those of you
> who haven't looked at it (and I can understand why), Shleifer argues
> that contract theory (post Williamson and Hart) supports the idea that
> almost any good or service can be provided more efficiently by the
> private sector.  He even concludes with a brief, superficial plug for
> educational vouchers.  He does not appear to recognize that his entire
> approach begs the question by assuming that all workers, whether
> publicly or privately employed, are opportunistic and self-interested,
> and that only competition and/or incentive-compatible contracts can
> light a fire under them.  This is equivalent to denying the existence of
> public service motives.  Clearly, without an ethos of public service,
> government becomes stultifying and tyrranical.  A rational research
> agenda would look for the circumstances under which public service
> flourishes or withers.
>
> But I'm not getting to the point.  What I found utterly surreal about
> this article is that its author is under a cloud for having personally
> misappropriated public funds.  So he is really modeling himself, and his
> own crass opportunism.
>
> What is the current status of the charges against Shleifer?  As I
> recall, USAID cancelled its contract with his unit at Harvard and
> initiated legal action.  Is the action still pending?  Does anyone out
> there have more information on this case?  And why would JEP print an
> article on this topic by someone in Shleifer's situation?
>
> Peter Dorman

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Date: Mon, 18 Jan 1999 08:54:14 -0800
From: Peter Dorman <dormanp@xxxxxxxxxxxxxxxxxxx>
To: Michael Perelman <michael@xxxxxxxxxxxxxxxxx>
Subject: [Fwd: Shleifer and incentives]
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	Sat, 16 Jan 1999 03:10:59 -0700 (MST)
Date: Fri, 15 Jan 1999 13:12:03 -0800
Reply-To: pen-l@xxxxxxxxxxxxxxxx
Sender: owner-pen-l@xxxxxxxxxxxxxxxx
From: Peter Dorman <dormanp@xxxxxxxxxxxxxxxxxxx>
Subject: Shleifer and incentives

I finally got around to reading Andrei Shleifer's rant against the
public sector in the Fall 98 J of Econ Perspectives.  For those of you
who haven't looked at it (and I can understand why), Shleifer argues
that contract theory (post Williamson and Hart) supports the idea that
almost any good or service can be provided more efficiently by the
private sector.  He even concludes with a brief, superficial plug for
educational vouchers.  He does not appear to recognize that his entire
approach begs the question by assuming that all workers, whether
publicly or privately employed, are opportunistic and self-interested,
and that only competition and/or incentive-compatible contracts can
light a fire under them.  This is equivalent to denying the existence of
public service motives.  Clearly, without an ethos of public service,
government becomes stultifying and tyrranical.  A rational research
agenda would look for the circumstances under which public service
flourishes or withers.

But I'm not getting to the point.  What I found utterly surreal about
this article is that its author is under a cloud for having personally
misappropriated public funds.  So he is really modeling himself, and his
own crass opportunism.

What is the current status of the charges against Shleifer?  As I
recall, USAID cancelled its contract with his unit at Harvard and
initiated legal action.  Is the action still pending?  Does anyone out
there have more information on this case?  And why would JEP print an
article on this topic by someone in Shleifer's situation?

Peter Dorman

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