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Williamson (1999) - Public And Private Bureaucracies (view source)
Revision as of 20:39, 15 June 2010
, 20:39, 15 June 2010no edit summary
===The Schema===
*<math>k \,</math> is the index of contractual hazard (think: "degree of asset specificity")*<math>s \,</math> is the contract safegaurds (think: degree to which the contract supports adaptations, through arbritation or fiat)
#accurate communication to counterparties of intent.
Williamson goes on to argue that only within a public bureau with low powered incentives, meticulous implementation of protocol, and high stability of employment, can probity be assured, also noting that autonomous adaptations will be low. Operating cost excesses are essentially irrelevant, and third order. Specifically, note that treason is a the punishment for violating probity in a public bureau, whereas termination of employment is the private equivalent.
Adaption entials the following steps:
#the occasion to adapt needs to be disclosed
#alternative identified
#ramifications worked out
#best adaptation decided
#choosen adaptation communicated and accepted
#adaptation implemented
#follow up assessments
#sequential adjustments
Holdup is in (5), but probity operates throughout.
Private implementation is deemed impossible, on the grounds of insufficient probit gaurantees. Regulation is also dismissed, partly on the basis of control difference of both omission (the regalator is one step removed) and commission (the regulator is positioned between the president and the firm), partly on the basis of leadership (the president may not be able to appoint his own person to head the regulator), and operational complaints (how does the government know that it is properly informed).
