Handbook of Economic Organization
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Handbook of Economic Organization

Integrating Economic and Organization Theory

Edited by Anna Grandori

This comprehensive and groundbreaking Handbook integrates economic and organization theories to help elucidate the design and evolution of economic organization. Economic organization is regarded both as a subject of inquiry and as an emerging disciplinary field in its own right, integrating insights from economics, organization theory, strategy and management, economic sociology and congnitive psychology. The contributors, who share this integrated approach, are distinguished scholars at the productive peak in their fields. Each original, state-of-the art chapter not only addresses foundational issues, but also identifies key issues for future research.
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Chapter 29: Public economic organisation

Jan-Erik Lane


The organisation of the public household, delivering a set of public services in a wide sense, is based upon a fundamental requirement for quid pro quo: the money provided the government(s) in the form of taxes and charges must at the end of the day correspond to the allocation of a set of valuable services, both quantitatively and qualitatively. But how is this to be achieved, in both a transparent and an effective way? At the root of the problematic of allocating public services is how to handle various modes of principal– agent interactions, where government can chose between alternative mechanisms: the bureau, incorporated units, ad hoc or statutory agencies, outsourcing, tournaments or auctions, tendering or bidding, public–private partnerships and multi-level governance. The overall trend in organisation change is the move away from hierarchy and formal organisation towards externalisation and networking. Public economic organisation is less the rule of authority, as with the classical Weberian model of the state, than the handling of massive numbers of contracts between government as the principal and a diverse set of agents.

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