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Whilst the Coalition Government's proposals for commissioning and competition mark a change in the balance between public, private and voluntary sectors in the provision of probation services, they do not represent the beginning of this process. This article sets current policy proposals in the context of related moves to open up the criminal justice market made by previous governments. It also considers the impact of wider developments in social policy and public sector reform, including payment by results, at a time of financial austerity. The article identifies a number of key themes that emerge from the changing balance between public, private and voluntary sectors and suggests that these can be used to guide responses to new arrangements for service delivery. It argues that, whilst there are real concerns about fragmentation in service delivery and further disadvantage for some groups of offenders, good practice is most likely to emerge if attention is paid to diversity, the development of local links and alliances and staff training and supervision.

In recent years, the emergence of new legal forms allowing for-profit firms to incorporate with a formal commitment to both profit and social purpose has disrupted the traditional American business-charity dichotomy. The arrival of these hybrid firms can be expected to affect the functioning of markets and poses a potential challenge to the role played by large nonprofits that provide quasi-public services such as education and health care. We construct duopoly models of competition between a nonprofit firm and either a traditional for-profit firm or a hybrid firm, simultaneously choosing output levels of a homogeneous good. We show that when the nonprofit competes with a hybrid firm it becomes less competitive in the sense that its output level contracts, it raises less net revenue with which to fund charity care, and it is more easily driven out of the market.

AbstractThis paper considers a mixed duopoly two‐sided market of platforms in which a private firm competes with a public firm in a linear city model with fixed demand of full coverage. We examine whether prices of platforms are lower in the mixed duopoly market than in the standard pure duopoly market in which two private firms compete. We show that introducing a public competitor may or may not induce lower prices of the private platform than introducing a private firm, depending on the quality of the public platform service. In particular, if the quality of the public platform is superior, the prices of the platforms are lower than when it competes with the private rival, whereas they are higher if the quality is lower. We also show that the private firm invests more than the public firm. This has the policy implication that maintaining lower platform prices by introducing a competing public platform will not be sustainable in the long run.

We present a simple Bertrand competition model with a Hotelling (Economic Journal, Vol. 39 (1929), pp. 41–57) type spatial competition by incorporating the framework of partial privatization developed by Bös (Privatization: A Theoretical Treatment, Oxford, Clarendon Press, 1991). We investigate simultaneous price choice and sequential price choice with respect to fixed locations of firms and show how the degree of privatization of a public firm influences social welfare in a mixed duopoly market. We also analyse sequential price competition with respect to the location choice of firms.

Book reviewed in this article:Amy Chua. 2003. Worldon Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability.Thomas L. Friedman. 2002. Longitudes and Attitudes: Exploring the World After September 11.Samuel P. Huntington. 1996. The Clash of Civilizations and the Remaking of World Order.