RE: Old High School

[Steve Cooke <scooke@uidaho.edu>]

Dale,
 It is conceivable to me that a public investment in the same project could 
be more expensive than a similar private investment. A problem is that the 
public servants and officials may be less diligent in spending money 
carefully because it is not their own. This is called the principal-agent 
problem. The agents (public officials) are less careful than the principals 
(voters) would be. (Remember the "Courtship of Miles Standish"? Who got the 
girl, the principal or the agent?)

I would quickly add that this problem not limited to government agents. Any 
organization w/ a large staff including large business corporation can have 
a principal-agent problem. For example, CEO's can overpay themselves or 
(perhaps less likely) their workers at the expense of share holders or 
customers.

To me, this principal-agent problem exists. It is often used in the battle 
of perceptions against government. However, it is just is applicable for 
big business. For example, TVA & Bonneville Power electric generation 
utilities are rationalized for continued public ownership because of their 
ability/willingness to provide low cost power to their customers, even 
lower than their private competitors. This gives regulators a benchmark to 
compare private power generation cost against. Examples going the other way 
can also be found. The cost of the pool may be one, I don't know, but it is 
surely  possible.

Both private and public organizations have problems. Ironically, in this 
case, both have the same problem. To me it is not that surprising in the 
following sense. Private business is a form of private government. 
Conversely, public government is a form of public business. They are less 
different in some ways than they appear from the outside. Each is providing 
goods and services, albeit of a different type.

Steve Cooke

-----Original Message-----
From:	Dale Goble [SMTP:gobled@uidaho.edu]
Sent:	Wednesday, July 08, 1998 10:55 AM
To:	John and Laurie Danahy
Cc:	scooke@uidaho.edu; 'vision2020@moscow.com'
Subject:	Re: Old High School


On Wed, 8 Jul 1998, John and Laurie Danahy wrote:

>      The concept that was recently used to explain the cost difference
> between the two pools was that Moscow's pool will be built with public
> money so naturally it would cost more.  This is a problem.  Why should I
> support a public project that is funded solely thru tax dollars when the
> same project could be built with private donations at a much less cost?


This is another of my favorite bits of nonsense: I have never seen
anything that suggests that this is accurate.  When examined in any
detail, the presumed-ability of private enterprise to do something more
cheaply comes from the fact that it is doing less.

Dale Goble
Moscow