@dfeldman I was pretty ambiguous in the piece about that, but I think private sector prices are subject to the same forces, but private sector contracting projects can pit those forces against one another, when the contractors have similar market power. So it's harder to make claims as general. Agency issues — to what degree are the people doing the contracting exposed to contract outcomes (especially price) — may then largely decide the balance. 1/

@dfeldman Public sector agents tend to be very weakly exposed to contract outcomes. Sometimes their exposure may be more aligned with vendor than purchaser interest (when, for example, there's the possibility of a job or board seat with the vendor as a downstream career). But even without such blatant corruption, public sector agents (both civil servants and electeds) are unlikely to have their salary or tenures tightly coupled to contract outcomes. 2/

@dfeldman Even in splashy cases in the public eye like CA HSR, blame is just too shiftable. So public sector purchasers tend pretty reliably to be unable to counter vendor determination to maximize take. 3/

@dfeldman Private sector purchasers definitely face that same determination, and as individuals we experience the same rapaciousness when, eg, we interact with private-equity-owned medicine or housing providers for example. Their "efficiency" is in large part a willingness to squeeze customers in ways that local, customer-interacting business people still balk at, for ethical and customary reasons. As individuals, we face a cost disease from minimal market power and motivated counterparties. 4/

@dfeldman But in private sector contracts where the contractor has a high degree of market power relative to many vendors, and where agents have strong incentives aligned with economic performance of the project, the same forces might lead to efficient outcomes for the purchaser, matched sometimes by brutal outcomes for vendors. I think it's harder to make very general claims. /fin