Public and Private Provision of Services to Landholders

Abstract

The question as to whether or under what circumstances government should use private sector producers to deliver services arises in a wide variety of contexts and has been considered in a variety of professional literatures. Contexts relate to commonwealth, state and territory and local levels of government and range across prison services, security for armed services bases, education and services for landholders. The issues involved have been scoped and analysed by economists, strategic management theorists, general management theorists, marketers and political scientists. The question is not so broad as to deal with the factors that justify government intervention, by way of direct production or funding of production, in the economy. The situation under discussion is one where intervention of this kind is justified, by some kind of market failure or other threat to economic efficiency. That is, the intervention is a response to a competent judgement that the production of the goods or services of interest would be at an inappropriate level if it were left to the free market. Our focus is whether it makes sense for government to engage directly in production or, in effect, to sub-contract or outsource production. The assumed legitimacy of intervention, and therefore the inadequacy of free-market production, is a defining characteristic of this situation and one that bears on all of the major related issues. A logical first step in analysing the factors that may define the suitability of direct or outsourced service provision to landholders, therefore, is to specify the situations under which public service provision is justified and what this indicates about the goods or services in question. A related matter in this paper is the possibly ephemeral nature of these situations, and the consequent need for government to withdraw from provision of services.