Lester Salamon's Tools Of Government

2109 Words5 Pages

To understand institutional change and how it is related to economic performance, we first must understand the mechanics of institutions and how this term is being defined within the context of public administration. Douglass North describes institutions as societal arrangements or constraints that have been agreed upon to assist in the regulation of economic and incentive driven behavior and that have the potential to conflict with the preferences of individuals. Institutions are often based on culturally shared beliefs and can be defined though the presence of specific legislation or they can be more generally defined through socially agreed upon expectations for behavior. The author describes institutions and the economy as functionally …show more content…

Using one or both of these approaches as a frame of reference, provide an analysis of the strengths and weaknesses associated with the use of vouchers to promote “school choice” and the likely prospects for the future/further implementation of vouchers …show more content…

In regards to economic considerations, the presence or absence of market failure would be a critical issue to evaluating the need for privatization. If the situation exists in which the utilization of a free market economy will product too much or too little of the particular good or service, the privatization of this type of organization may prove to be detrimental to the mission of the organization and to the benefit of the community. If market failure is not an issue of consideration, privatization brings with it the concern of competition and how this will impact supply and demand. An artificial price ceiling or floor that had previously existed with the public institution will now be removed, allowing the market to have a natural equilibrium point that had not previously existed. This action could be a potential benefit to the given market, relieving either a surplus or shortage of the good or service. Shortages and surpluses on the supply curve could have a considerable effect on both the pricing of the specific product or service that the agency offers, as well as the overall quantity sold to the consumer. These types of sudden shifts in the supply availability could

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