Part I: the state and the market The traditional model of public service provision Public service provision Market failure The organisation of government services The failure of the state Public choice Public choice and politicians Information, control and entrepreneurialism The theory of government failure The market alternative Economics, law and organisation Economic arguments Law and contracts Organisation theory and networks Institutional change The political dynamics of marketisation Changing ideas Managerialism Political change Political and electoral systems The institutional framework Interests and public opinion Public opinion Part II: the market in action Charging for public services For and against charging The limits of charging Payments, subsidy and vouchers Difficulties of pricing practice The development of charging Internal charging Contracts and competition The case for contracting The contract process The dimensions of contracts The nexus of contracts The development of contracting The nature of contracts Price, quality and risk Monitoring and control Completeness and hierarchy Private and public providers The pattern of provision Internal markets The argument for internal markets Internal markets in health Local government Comunity care The implications of internal markets Agencies and devolved control Financial devolution The financial management initiative The resource management initiative Local management of schools Devolved budgets Agencies, trusts and companies Health service trusts Grant-maintained schools Further education Companies Executive agencies Part III: the impact of marketisation Organisation and accountability Organisation Centralisation and decentralisation Budgeting and finance Industrial relations Law, accountability and ethics Efficiency and quality The financial effects Service costs Charging Devolution and internal markets Discussion The sources of changes in efficiency Transaction costs Effectiveness and quality User involvement and quality Conclusion