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Reforming the local public sector: economics and politics in privatization of water and solid waste

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  • Germa Bel
  • Xavier Fageda

Abstract

Several empirical studies have analyzed the factors that influence local privatization. We examine the influence of transaction costs and political factors on local governments' choices through new variables. We consider two relevant services accounting for different amounts of transaction costs: water and solid waste delivery. Our results show that privatization is less common for water, which has higher transaction costs. Furthermore, we find that municipalities with a conservative ruling party privatize more often regardless of the ideological orientation of the constituency. Finally, we find that intermunicipal cooperation may be a suitable organizational form for some municipalities.

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Bibliographic Info

Article provided by Taylor and Francis Journals in its journal Journal of Economic Policy Reform.

Volume (Year): 11 (2008)
Issue (Month): 1 ()
Pages: 45-65

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Handle: RePEc:taf:jecprf:v:11:y:2008:i:1:p:45-65

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Related research

Keywords: privatization; contracting-out; local governments;

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References

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  18. Stéphane Saussier & Claude Ménard, 2000. "Contractual Choice and Performance the Case of Water Supply in France," Revue d'Économie Industrielle, Programme National Persée, vol. 92(1), pages 385-404.
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  22. Michael D. Whinston, 2003. "On the Transaction Cost Determinants of Vertical Integration," Journal of Law, Economics and Organization, Oxford University Press, vol. 19(1), pages 1-23, April.
  23. Germa Bel & Anton Costas, 2006. "Do Public Sector Reforms Get Rusty? Local Privatization in Spain," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 9(1), pages 1-24.
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Citations

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Cited by:
  1. Germà Bel & Xavier Fageda & Melania Mur, 2011. "Why do municipalities cooperate to provide local public services? An empirical analysis," IREA Working Papers 201118, University of Barcelona, Research Institute of Applied Economics, revised Oct 2011.
  2. Germà Bel & Xavier Fageda & Mildred E. Warner, 2009. "Is Private Production of Public Services Cheaper than Public Production? A meta-regression analysis of solid waste and water services," IREA Working Papers 200923, University of Barcelona, Research Institute of Applied Economics, revised Oct 2009.
  3. Daniel Albalate & Germà Bel & R. Richard Geddes, 2012. "“Recovery Risk and Labor Costs in Public-Private-Partnerships: Contractual Choice in the U.S. Water industry”," IREA Working Papers 201222, University of Barcelona, Research Institute of Applied Economics, revised Dec 2012.
  4. Halstead, John M. & Mohr, Robert D. & Deller, Steven C., 2010. "Service Delivery in Rural Municipalities: Privatize, Cooperate, or Go It Alone?," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 60991, Agricultural and Applied Economics Association.
  5. Andrés Picazo-Tadeo & Francisco González-Gómez & Jorge Wanden-Berghe & Alberto Ruiz-Villaverde, 2012. "Do ideological and political motives really matter in the public choice of local services management? Evidence from urban water services in Spain," Public Choice, Springer, vol. 151(1), pages 215-228, April.
  6. Germà Bel & Xavier Fageda & Melania Mur, 2010. "¿Por qué se privatizan servicios en los municipios (pequeños)? Evidencia empírica sobre residuos sólidos y agua," Hacienda Pública Española, IEF, vol. 192(1), pages 33-58, March.
  7. Germà Bel & Xavier Fageda, 2008. "Privatization and competition in the delivery of local services: An empirical examination of the dual market hypothesis," Working Papers XREAP2008-04, Xarxa de Referència en Economia Aplicada (XREAP), revised Apr 2008.

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