The Proper Scope of Government: Theory and an Application to Prisons
建立模型分析政府何时应内部提供服务、何时外包，发现私人提供者比政府雇员更有动力提升质量和降低成本，但过度降低成本会损害不可合同化的质量，并应用于理解监狱私有化的成本与收益。
When should a government provide a service in-house, and when should it contract out provision? We develop a model in which the provider can invest in improving the quality of service or reducing cost. If contracts are incomplete, the private provider has a stronger incentive to engage in both quality improvement and cost reduction than a government employee has. However, the private contractor's incentive to engage in cost reduction is typically too strong because he ignores the adverse effect on noncontractible quality. The model is applied to understanding the costs and benefits of prison privatization.