Author: Rose-Ackerman, Susan

Publication Year: 1979

Media Type: Report

Summary:

Charities that provide services to needy people are frequently discouraged from competing with one another. Recent reform efforts stress coordination, not competition. This paper, argues, however, that the selective use of market incentives will sometimes improve service quality and charitable performance. If it is costly for funding agencies to observe service quality directly, they may be able to use unsubsidized, paying customers to monitor quality for them. The paper presents an abstract model where paying customers assure high quality service for all and then discusses the strengths and weaknesses of the proposal when applied to programs that deinstitutionalize the mentally retarded, subsidize health care, and integrate schooling.

Abstract:

Charities that provide services to needy people are frequently discouraged from competing with one another. Recent reform efforts stress coordination, not competition. This paper, argues, however, that the selective use of market incentives will sometimes improve service quality and charitable performance. If it is costly for funding agencies to observe service quality directly, they may be able to use unsubsidized, paying customers to monitor quality for them. The paper presents an abstract model where paying customers assure high quality service for all and then discusses the strengths and weaknesses of the proposal when applied to programs that deinstitutionalize the mentally retarded, subsidize health care, and integrate schooling. (Author's abstract)

Arts & Intersections:

Categories: Fundraising, Funding