The choice between private and government provision of a productive public good like infrastructure (public capital) is examined in the context of an endogenously growing open economy. The accumulation of public capital need not require government provision, in contrast to the standard assumption in the literature. Even with an efficient government, the relative costs and benefits of government and private provision depend crucially on the economy's underlying structural conditions and borrowing constraints in international capital markets. Countries with limited substitution possibilities and large production externalities may benefit from governments encouraging private provision of public capital through targeted investment subsidies. By contrast, countries with flexible substitution possibilities and relatively smaller externalities may benefit either from governments directly providing public capital or from regulation of private providers. The transitional dynamics also are shown to depend on the underlying elasticity of substitution and the size of the production externality.

Most long-term care for older people in the UK has been provided by independent organisations since the 1980s. This article draws on interviews with various stakeholders in the sector, as well as secondary sources. The evidence shows that government policies in the areas of funding, regulation and the labour market are facilitating the concentration of long-term care provision. Three areas of related concern are identified: firstly, the effects of increased ownership transfers; secondly, issues relating to standardisation; and thirdly, the possibility of a decline in the quality of care if local monopolies emerge. It is concluded that government regulation must be concerned with the structure of the market, as well as the conditions within care homes, if the interests of residents are to be protected.