Private provision of public services in developing countries

Charles Ndandiko

Research output: ThesisPhD Thesis - Research UT, graduation UTAcademic

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Abstract

This thesis questions the wisdom of indiscriminately prescribing the private sector as a remedy for public sector failure in providing public services. We position our study against the background of the increasing occurrence of private sector provision of public services in developing countries even though such countries exhibit inadequacies in conditions that make private provision thrive. Using our choice of efficiency measurement techniques (mainly Data Envelopment Analysis) in analysing the waste collection and water supply services of over 30 local governments in Uganda, we empirically ascertain that there are no systematic inherent gains to private sector provision in terms of efficiency and no support for the notion that a public sector provider is intrinsically less efficient. We instead find other factors such as competition, capacity and regulation may better explain efficiency levels. Hence, contrary to theory, private involvement in local service delivery does not imply the attainment of higher levels of efficiency; perhaps owing to, in the context of a developing country like Uganda, the absence of strong public and private institutions and an enabling environment reminiscent of conditions that make markets work. We conclude that private sector provision in a developing country should be accompanied by financial and skills’ enhancement of both the public and private institutions and an improved and systematic regulation. Public policy makers ought to establish prevalence of conditions that favour private sector provision before transferring a service to the private sector; otherwise the anticipated solution to the problem ends up creating a much bigger problem!
Original languageUndefined
Supervisors/Advisors
  • Telgen, Jan , Supervisor
Place of PublicationEnschede
Publisher
Print ISBNs9789085706021
Publication statusPublished - 8 Oct 2010

Keywords

  • IR-73448

Cite this

Ndandiko, C. (2010). Private provision of public services in developing countries. Enschede: University of Twente.
Ndandiko, Charles. / Private provision of public services in developing countries. Enschede : University of Twente, 2010. 213 p.
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Private provision of public services in developing countries. / Ndandiko, Charles.

Enschede : University of Twente, 2010. 213 p.

Research output: ThesisPhD Thesis - Research UT, graduation UTAcademic

TY - THES

T1 - Private provision of public services in developing countries

AU - Ndandiko, Charles

PY - 2010/10/8

Y1 - 2010/10/8

N2 - This thesis questions the wisdom of indiscriminately prescribing the private sector as a remedy for public sector failure in providing public services. We position our study against the background of the increasing occurrence of private sector provision of public services in developing countries even though such countries exhibit inadequacies in conditions that make private provision thrive. Using our choice of efficiency measurement techniques (mainly Data Envelopment Analysis) in analysing the waste collection and water supply services of over 30 local governments in Uganda, we empirically ascertain that there are no systematic inherent gains to private sector provision in terms of efficiency and no support for the notion that a public sector provider is intrinsically less efficient. We instead find other factors such as competition, capacity and regulation may better explain efficiency levels. Hence, contrary to theory, private involvement in local service delivery does not imply the attainment of higher levels of efficiency; perhaps owing to, in the context of a developing country like Uganda, the absence of strong public and private institutions and an enabling environment reminiscent of conditions that make markets work. We conclude that private sector provision in a developing country should be accompanied by financial and skills’ enhancement of both the public and private institutions and an improved and systematic regulation. Public policy makers ought to establish prevalence of conditions that favour private sector provision before transferring a service to the private sector; otherwise the anticipated solution to the problem ends up creating a much bigger problem!

AB - This thesis questions the wisdom of indiscriminately prescribing the private sector as a remedy for public sector failure in providing public services. We position our study against the background of the increasing occurrence of private sector provision of public services in developing countries even though such countries exhibit inadequacies in conditions that make private provision thrive. Using our choice of efficiency measurement techniques (mainly Data Envelopment Analysis) in analysing the waste collection and water supply services of over 30 local governments in Uganda, we empirically ascertain that there are no systematic inherent gains to private sector provision in terms of efficiency and no support for the notion that a public sector provider is intrinsically less efficient. We instead find other factors such as competition, capacity and regulation may better explain efficiency levels. Hence, contrary to theory, private involvement in local service delivery does not imply the attainment of higher levels of efficiency; perhaps owing to, in the context of a developing country like Uganda, the absence of strong public and private institutions and an enabling environment reminiscent of conditions that make markets work. We conclude that private sector provision in a developing country should be accompanied by financial and skills’ enhancement of both the public and private institutions and an improved and systematic regulation. Public policy makers ought to establish prevalence of conditions that favour private sector provision before transferring a service to the private sector; otherwise the anticipated solution to the problem ends up creating a much bigger problem!

KW - IR-73448

M3 - PhD Thesis - Research UT, graduation UT

SN - 9789085706021

PB - University of Twente

CY - Enschede

ER -

Ndandiko C. Private provision of public services in developing countries. Enschede: University of Twente, 2010. 213 p.