This paper analyzes the organization of public registries comparing five organizational forms: (1) the bureaucratic expense centers used to provide privately valuable services in the welfare state; (2) the “internal markets” introduced to reform them and the hybrid solutions that have been used by the liberal state since the 19th century to provide such privately valuable services, including (3) revenue centers based on user fees, (4) franchised systems in which professional civil servants are in addition paid with the profit of an office, and (5) the contemporary variant in which the Government contracts out the provision of the whole service to a private firm.
Traditional hybrid solutions with franchised units, which produce relatively effective outcomes, contrast starkly not only with those of standard bureaucracy but also with those found in modern internal markets and privatized services. Whereas internal markets strive to develop comprehensive measures of performance but provide weak incentives, these liberal-state solutions rely on partial measures of performance but provide strong incentives. Moreover, in contrast with privatized services, these incentives operate at the level of the individual professional in charge of the service. Also, instead of requiring large staffs to manage suppliers and their interaction with users in the internal market, such hybrid solutions work in a regime of “automatic management” and are therefore frugal in their use of planning and supervision resources.
This comparison suggests that market forces may play a better role in organizing public registries when they are limited to a few variables, which makes stronger incentives possible and, at the same time, reduces the need for extensive planning and supervisory staff.