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Public Sector Entrepreneurialism and the Production of Defense

PFM, Vol. 7 No. 3, (2007)

This paper considers the proposition, popular in much political rhetoric over the last two decades, that public sector organisations should develop entrepreneurial capabilities in their provision of public goods and their interactions with private sector providers. We take national security as a paradigm case of public goods and discuss issues around entrepreneurship in its provision by public and private sector organisations. We argue that while there appear to be clear opportunities for extending an entrepreneurial culture into the operations of national defense organisations, the special features of providing security as a public good presents fundamental challenges. We use a principal-agent framework to undertake analysis.

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