1. Introduction
Public goods are often produced by partners who care about the benefits of the public good. The partners may be different public entities (say, federal and local government agencies), or there may be a “public–private partnership” in which the responsibility for the delivery of public goods and services is shared between the state and the private sector. Following Besley and Ghatak (2001), as a lead example we consider a partnership between the government and an NGO which directly cares about a public project. Should the government or the NGO own the public project? In this paper, we provide a new perspective on how ownership matters in public good provision when contracts are incomplete. Specifically, we argue that in the presence of bargaining frictions the qualitative differences between incomplete contracting models with public goods and private goods may actually be smaller than has previously been thought.