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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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File URL: http://www.informaworld.com/openurl?genre=article&doi=10.1080/17487870802134884&magic=repec&7C&7C8674ECAB8BB840C6AD35DC6213A474B5
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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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Cited by:
  1. Germà Bel & Xavier Fageda & Melania Mur, 2009. "¿Por qué se privatizan servicios en los municipios (pequeños)?Evidencia empírica sobre residuos sólidos y agua," IREA Working Papers 200908, University of Barcelona, Research Institute of Applied Economics, revised Apr 2009.
  2. 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.
  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. Germ� Bel & Xavier Fageda & Mildred E. Warner, 2010. "Is private production of public services cheaper than public production? A meta-regression analysis of solid waste and water services," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 29(3), pages 553-577.
  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, 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.
  7. 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.

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