This presentation is about the concept of demand and supply in the process of service delivery, it also provide elaborations on the concept of information asymmetric in service delivery and how it act as a challenge to service recipients and therefore it suggest strategies and measure which the government can take to avoid the problem of information asymmetric in service delivery.

1. The concept of demand and
supply
 The concept of demand and supply is originated
from the field of economics, in general sense
economics is the study of production, distribution
and consumption.
 Economics can be divided into two broad areas of
study: which are macroeconomics and
microeconomics
 Macroeconomics deals with aggregate economic
quantities, such as national output and national
income
 It focuses with the problems faced by the
economy as a whole, and not just by an individual

2. CONT…….
 On the other hand microeconomics, deals
with markets, and decision making of
individual economic units, including
consumers and businesses.
 Traditionally, microeconomics classifies private
economic units into two groups: consumers (or
households) and firms. These two groups give
rise, to the theory of the consumer and theory
of the firm as two branches of study.

3. Cont…..
 The theory of the consumer deals with
consumption (the demand for goods and
services)
 The theory of the firm deals with the supply of
goods and services by profit-m maximizing
firms.
 Therefore the two theories, which are the
theory of the consumer and the theory of the
firm are important because they help us
understand the foundations of demand and
supply

4. Demand and supply meaning
 Demand is the willingness and ability of
consumers to purchase a given amount of a
good or service at a given price.
 Supply is the willingness of sellers to offer a
given quantity of a good or service for a given
price

5. Cont…..
 In the context of service delivery, demand side
refers to the behavior and inputs of the recipients
or intended recipients of these efforts: such as
individuals, households and communities.(citizens
side)
 Supply side refers to service delivery inputs such
as human resources and supplies provided on the
basis of formal sectoral planning by technical
planners and managers these services can be
provided through Ministries, government agencies
and public corporations.

6. Information Asymmetric
 Asymmetric information refers to the situation
in which some agent in the trade possess
information while others agents involved in the
same trade do not.
 Buyers behavior is crucially dependent upon
the information that is available before and
after purchase of service. In order to make
choices, buyers need at least to know the price
and quality of the various service alternatives.

7. Information Asymmetry cont…..
 Lack of information on service provided may
lead to asymmetric information thus limiting
buyers and services users to make decision
 A key assumption for the theorem to hold is
that the characteristics of all products traded
on the market should be equally observed by
all agents. When such assumption fails to
hold, i.e. when information is asymmetric,
prices are distorted and do not achieve
optimality in the allocation of resources.

8. REMEDIES FOR ASYMMETRIC
INFORMATION
 In order to overcome the market imperfection
imposed by asymmetric information some kind
of mechanism is needed to give services users
an accurate picture of what they are buying.
 The theorist in economics have concluded that
markets in these goods have great difficulty
achieving an efficient market unless providers
are legal liable for their work (Dulleck, 2006).
This kind of liability is through;

9. Remedies for Asymmetry
information
 Provision of services by well organized public
sector
 Imposing government regulations
 Setting standards of service delivery
 Professional norms
 Role of international donors and NGOs

10. Conclusion
 In the context of service delivery having lack of
information on services provided is very
challenging especially to the citizens since some
services such as health need expertise to assess
on their quality, thus there is a room of citizens to
be provided with poor services due to lack of
information
 Therefore in order to avoid problems, the
government should take measures such as
provision of services by a well organized public
sector, set standards, rules and regulations and
inculcating professional norms.