List of Service Models

The foregone revenue model means that the government promotes a particular service or behavior by fore-going revenue that it could, in principle, collect. Economically, this approach is sometimes referred to as a type of subsidy. However, since this is thought of as a separate iteration of the government’s role as a funder, we have categorized it as a service model in its own right. The waiver of revenue to which the state would otherwise be entitled can be regarded as a “pecuniary” benefit. In terms of financial law, revenue foregone is sometimes treated in the same way as a government expenditure.

The foregone revenue model means that the government promotes a particular service or behavior by fore-going revenue that it could, in principle, collect. Economically, this approach is sometimes referred to as a type of subsidy. However, since this is thought of as a separate iteration of the government’s role as a funder, we have categorized it as a service model in its own right. The waiver of revenue to which the state would otherwise be entitled can be regarded as a “pecuniary” benefit. In terms of financial law, revenue foregone is sometimes treated in the same way as a government expenditure.

The voucher model allows the beneficiary to receive a specific service that the state finances directly from the provider. The attractiveness of this model is that the voucher can only be used for predetermined bene-fits, but within those benefits is a choice. Vouchers can be issued physically (e.g., for the purchase of food), but they can also have an implicit effect (e.g., through a so-called “subject promotion” in the social sec-tor). This means that money does not flow to the organization providing the service (the “object,” as in a subsidy), but rather to the recipient of the service (the “subject”).

The voucher model allows the beneficiary to receive a specific service that the state finances directly from the provider. The attractiveness of this model is that the voucher can only be used for predetermined bene-fits, but within those benefits is a choice. Vouchers can be issued physically (e.g., for the purchase of food), but they can also have an implicit effect (e.g., through a so-called “subject promotion” in the social sec-tor). This means that money does not flow to the organization providing the service (the “object,” as in a subsidy), but rather to the recipient of the service (the “subject”).

The subsidy model is a financial benefit provided by the state to organizations or private individuals that (unlike a performance mandate) is not tied to a direct service. The state financially supports a certain behavior, which can also take the form of an omission.