When does and doesn’t privatization work?

People love to debate this question, particularly when it comes to health care. If you’re among them, read Eduardo Porter’s recent NYT article, in which he discusses The Org: The Underlying Logic of the Office, by Ray Fisman and Tim Sullivan. Porter quotes Fisman,

If I can write a perfect contract in which I pay for a concrete observable outcome, can rule out cream-skimming and can ensure the measure is not gamed, there is no reason that the private sector can’t do it better.

Is this a fair test? What’s its sensitivity and specificity? Does it rule in or out health care or health insurance?

@afrakt

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