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Public Procurement versus Laissez-Faire: Evidence from Household Waste Collection

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  • Jaakko Meriläinen
  • Janne Tukiainen

Abstract

We document that switching from laissez-faire production to public procurement in residential waste collection in Finland reduces the number of firms active in the local market, but induces a statistically significant and large decrease in unit prices on average. While public procurement, thus, seems to be desirable from the citizens’ perspective, not all municipalities adopt public procurement. We provide descriptive evidence that municipal council composition is associated with the chosen regime. This suggests that local politics may be one obstacle for the efficient provision of local public goods.

Suggested Citation

  • Jaakko Meriläinen & Janne Tukiainen, 2019. "Public Procurement versus Laissez-Faire: Evidence from Household Waste Collection," CESifo Economic Studies, CESifo Group, vol. 65(4), pages 446-463.
    • Handle: RePEc:oup:cesifo:v:65:y:2019:i:4:p:446-463.
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    File URL: http://hdl.handle.net/10.1093/cesifo/ifz001
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    Cited by:

    1. Niklas Potrafke, 2019. "Does Public Sector Outsourcing Decrease Public Employment? Empirical Evidence from OECD Countries," CESifo Economic Studies, CESifo Group, vol. 65(4), pages 464-484.
    2. Jaakko Meriläinen & Janne Tukiainen, 2019. "Public Procurement versus Laissez-Faire: Evidence from Household Waste Collection," CESifo Economic Studies, CESifo Group, vol. 65(4), pages 446-463.
    3. Beccarello, Massimo & Di Foggia, Giacomo, 2023. "Defining the Organization of Municipal Solid Waste Management Based on Production Costs," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 7(2), pages 1-15.
    4. Paul K Gorecki, 2020. "Household Waste Policy in Ireland: Options for Competition, Environment and Regulation," The Economic and Social Review, Economic and Social Studies, vol. 51(2), pages 305-326.

    More about this item

    Keywords

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    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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