PUBLIC PRODUCTION & BUREUCRACY.

Presentasi berjudul: "PUBLIC PRODUCTION & BUREUCRACY."— Transcript presentasi:

1 PUBLIC PRODUCTION & BUREUCRACY

2 Market Failure  Government intervention Government production? Privatization? Market not competitif Public production of private goods

3 Alasan incompetitive market Increasing
NATURAL MONOPOLY: Public production of private goods Alasan incompetitive market Increasing return to scale  only 1 firm  natural monopoly, misalnya air (biaya utama: pipa) Price Profit maximizing quantity for monopolist  Q* Efficiency  competitive market  P = MC  Qo Tapi timbul masalah  subsidi atau P = AC (zero profit point) Demand P Profit per unit = selisih P dg AC Monopolist’s profit AC MC MR Output Q* Q1 Qo

4 EFFECTS OF SUNK COSTS Sunk costs dpt berfungsi sbg barrier to entry shg monopolist tdk peduli dg new entry dan membebankan P yg max. profit pd MR = MC MULTIPRODUCT NATURAL MONOPOLY P bisa seragam  cross subsidy, atau Tdk seragam  P lebih tinggi pd demand elasticity rendah dan P yg rendah pd demand elasticity tinggi (lih. Figure 8.2)

5 REGULATION AND TAXATION (SUBSIDY)
Masalah produksi brg publik: Pemerintah Swasta? Dg swasta  regulation and subsidy (tax): Kebijakan nasional yg konsisten & efisien Dg pajak dan subsidi dpt memberikan estimasi yg jelas ttg biaya utk mencapai st tujuan. Swasta lbh efisien dibanding pemerintah

6 SUMBER INEFISIENSI SEKTOR PUBLIK
Organizational incentives - Not driven by profit motive - Personnel restrictions: sulit di PHK Procurement restrictions: Pesanan pem. sering ber-tele2 Individual differences - Bureucratic behaviour - Principle-agent problems Bureucratic procedures & risk aversion

7 CORPORATIZION Government corporation Performance-based organization A GROWING CONCENSUS ON GOVERNMEN ROLE IN PRODUCTION Government should not be involved in the production of ordinary private goods