ASYMMETRIC INFORMATION IN NEW PUBLIC MANAGEMENT

Reforming process in public administration can be based on principles of New Public Management that seeks for higher efficiency by applying business-like methods in public administration. It deals with the contracting out practice, when public goods and services are delivered by private economic units. Private delivery of public goods and services is often assumed to be more efficient and economic on one hand, but on the other hand, it may also be connected with worse quality, and availability of them, and can be accompanied by asymmetric information linked to moral hazard and adverse selection. Disaggregation of public sector can lead to increasing numbers of units providing public activities, and so principal-agent model can be applied. The principles of New Public Management, private delivery of public goods and services and the presence of asymmetric information in it are discussed in the paper, with some applications on the Czech Republic.