Vouchers As an Alternative Public Sector Funding System

Abstract

This paper analyses the voucher concept. It considers different types of vouchers in the public and private sectors, distinguishes between explicit and implicit vouchers, and develops both a general model and a local government model of vouchers. It also reviews arguments for and against vouchers, considers the characteristics and dimensions of vouchers and identifies the rights and responsibilities attached to their use. Based on this comprehensive analysis, it develops a new definition of public service vouchers incorporating exit and voice. The analysis also provides a schema that can be used to design, modify and evaluate individual voucher systems.