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Local Government Restructuring: Privatization and Its Alternatives


  • Mildred Warner

    (Department of City and Regional Planning, Cornell University)

  • Robert Hebdon

    (McGill University)


Local government restructuring should no longer be viewed as a simple dichotomy between private and public provision. A 1997 survey of chief elected township and county officials in New York shows that local governments use both private and public sector mechanisms to structure the market, create competition, and attain economies of scale. In addition to privatization and inter-municipal cooperation, two alternative forms of service delivery not previously researched-reverse privatization and governmental entrepreneurship-are analyzed here. Logistic regression on the 201 responding governments differentiates the decision to restructure from the level and complexity of restructuring. Results confirm that local governments are guided primarily by pragmatic concerns with information, monitoring, and service quality. Political factors are not significant in the restructuring process and unionization is only significant in cases of simple restructuring (privatization or cooperation used alone). Fiscal stress is not a primary motivator, but debt limits are associated with more complex forms of restructuring. Restructuring service delivery requires capacity to take risks and is more common among experienced local officials in larger, higher-income communities. Restructuring should be viewed as a complex, pragmatic process where governments combine public and private provision with an active role as service provider and market player. © 2001 by the Association for Public Policy Analysis and Management.

Suggested Citation

  • Mildred Warner & Robert Hebdon, 2001. "Local Government Restructuring: Privatization and Its Alternatives," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 20(2), pages 315-336.
  • Handle: RePEc:wly:jpamgt:v:20:y:2001:i:2:p:315-336 DOI: 10.1002/pam.2027

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    References listed on IDEAS

    1. Yolanda K. Kodrzycki, 1998. "Fiscal pressures and the privatization of local services," New England Economic Review, Federal Reserve Bank of Boston, issue Jan, pages 39-50.
    2. Robert McGuire & Robert Ohsfeldt & T. Cott, 1987. "The determinants of the choice between public and private production of a publicly funded service," Public Choice, Springer, vol. 54(3), pages 211-230, August.
    3. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
    4. repec:hrv:faseco:30727606 is not listed on IDEAS
    5. Marmolo, Elisabetta, 1999. "A constitutional theory of public goods," Journal of Economic Behavior & Organization, Elsevier, vol. 38(1), pages 27-42, January.
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