Private Outsourcing and Competition: Subsidized Food Distribution in Indonesia
We explore the impact of allowing for outsourcing service delivery to the private sector within Indonesia’s largest targeted transfer program. In a field experiment across 572 municipalities, we find that allowing for outsourcing the last mile of food delivery reduced operating costs without sacrifi...
| Main Authors: | , , , , |
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| Other Authors: | |
| Format: | Article |
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University of Chicago Press
2020
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| Online Access: | https://hdl.handle.net/1721.1/124283 |
| _version_ | 1826213109005549568 |
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| author | Banerjee, Abhijit Hanna, Rema Kyle, Jordan Olken, Benjamin Sumarto, Sudarno |
| author2 | Massachusetts Institute of Technology. Department of Economics and Engineering |
| author_facet | Massachusetts Institute of Technology. Department of Economics and Engineering Banerjee, Abhijit Hanna, Rema Kyle, Jordan Olken, Benjamin Sumarto, Sudarno |
| author_sort | Banerjee, Abhijit |
| collection | MIT |
| description | We explore the impact of allowing for outsourcing service delivery to the private sector within Indonesia’s largest targeted transfer program. In a field experiment across 572 municipalities, we find that allowing for outsourcing the last mile of food delivery reduced operating costs without sacrificing quality. However, the prices citizens paid were lower only where we modified the bidding rules to encourage more bidders. Higher rents are associated with greater entry despite elites’ efforts to block reform. In this context, the option to outsource and sufficient competition generated significant benefits relative to public distribution. |
| first_indexed | 2024-09-23T15:43:27Z |
| format | Article |
| id | mit-1721.1/124283 |
| institution | Massachusetts Institute of Technology |
| last_indexed | 2024-09-23T15:43:27Z |
| publishDate | 2020 |
| publisher | University of Chicago Press |
| record_format | dspace |
| spelling | mit-1721.1/1242832022-10-04T05:31:21Z Private Outsourcing and Competition: Subsidized Food Distribution in Indonesia Banerjee, Abhijit Hanna, Rema Kyle, Jordan Olken, Benjamin Sumarto, Sudarno Massachusetts Institute of Technology. Department of Economics and Engineering We explore the impact of allowing for outsourcing service delivery to the private sector within Indonesia’s largest targeted transfer program. In a field experiment across 572 municipalities, we find that allowing for outsourcing the last mile of food delivery reduced operating costs without sacrificing quality. However, the prices citizens paid were lower only where we modified the bidding rules to encourage more bidders. Higher rents are associated with greater entry despite elites’ efforts to block reform. In this context, the option to outsource and sufficient competition generated significant benefits relative to public distribution. 2020-03-24T15:45:35Z 2020-03-24T15:45:35Z 2019-02 Article http://purl.org/eprint/type/JournalArticle 0022-3808 1537-534X https://hdl.handle.net/1721.1/124283 Banerjee, Abhijit et al. "Private Outsourcing and Competition: Subsidized Food Distribution in Indonesia."Journal of Political Economy 127, 1 (February 2019): 101-137 © 2019 by The University of Chicago http://dx.doi.org/10.1086/700734 Journal of Political Economy Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use. application/pdf University of Chicago Press Nicholas Albaugh |
| spellingShingle | Banerjee, Abhijit Hanna, Rema Kyle, Jordan Olken, Benjamin Sumarto, Sudarno Private Outsourcing and Competition: Subsidized Food Distribution in Indonesia |
| title | Private Outsourcing and Competition: Subsidized Food Distribution in Indonesia |
| title_full | Private Outsourcing and Competition: Subsidized Food Distribution in Indonesia |
| title_fullStr | Private Outsourcing and Competition: Subsidized Food Distribution in Indonesia |
| title_full_unstemmed | Private Outsourcing and Competition: Subsidized Food Distribution in Indonesia |
| title_short | Private Outsourcing and Competition: Subsidized Food Distribution in Indonesia |
| title_sort | private outsourcing and competition subsidized food distribution in indonesia |
| url | https://hdl.handle.net/1721.1/124283 |
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