Is private sector provide housing an efficient than public sector?And why?

1 Answer

  • 1 decade ago
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    Yes, private sector housing is almost always more efficient than public sector housing.

    If the market for housing construction is a adequately competitive, private sector housing would be always more efficeint.

    If however the housing construction business is a monopoly or oligopoly, both public and private sector can be equally inefficient but still in most cases the private sector will be somewhat better from the point of view of house/ home buyers in terms the choices given to them and after-sale consumer rights protection and customer complaint redressal.

    In any case, the public sector housing is public sector in name only as the public sector, more often than not, farma out bulk of the job of design and construction to private sector firms, adding to overheads, and allowing poor quality inspection and supervision.

    However the private sector may not be keen to deal with housing for low income families and this market gap needs to be filled in the public sector even if it is inefficient and costlier.

    The main reasons why public sector is inefficeint is because of its links with the govt. procedures and the Govt. employees. The procedures are more time consuming and govt. employees do not lose jobs or get lower performance bonus for delays. Public sector employees may be afraid of taking decisions individually for being later blamed as corrupt by Govt. investigating agancies. Corruption generally is higher in govt. set ups as large deals and lobbying are very common. Besides there is hardly any rewrd/ penalty for being efficient/ ineffcient. Govt. emplyees and procedures are oriented to doing benevolent service for the customers and does not recognise the custoemrs' rights.

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