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Market Concentration Impact on Public Service Delivery

In: Advances in Applied Microeconomics

Author

Listed:
  • Beáta Mikušová Meričková

    (Matej Bel University)

  • Kristína Murínová

    (Matej Bel University)

  • Nikoleta Jakuš Muthová

    (Matej Bel University)

Abstract

Market concentration of a public service is one of the factors influencing the risks associated with contracting out as one of its delivery arrangements, as described by the principal-agent theory. A monopoly of the service producer (the agent) creates room for enforcing the producer’s own interests but not those of a service provider (the principal), whose interest is to provide a public service effectively. Market concentration, therefore, affects the effectiveness of contracting out services and motivates the internalization of services. In the case of local public services, a trend of remunicipalization is visible. The study aims to identify the market concentration of waste collection and disposal services as a factor affecting the cost-effectiveness of contracting out and contract management quality in the environment of Slovak municipalities. Market concentration is analyzed through a market concentration index, in this case, the Herfindahl-Hirschman index. The findings of this study confirm the existence of a high market concentration of the service and show the possible solution for the remunicipalization of services through inter-municipal cooperation. However, some barriers in inter-municipal cooperation implementation were also identified.

Suggested Citation

  • Beáta Mikušová Meričková & Kristína Murínová & Nikoleta Jakuš Muthová, 2025. "Market Concentration Impact on Public Service Delivery," Springer Proceedings in Business and Economics, in: Nicholas Tsounis & Aspasia Vlachvei (ed.), Advances in Applied Microeconomics, chapter 0, pages 67-89, Springer.
    • Handle: RePEc:spr:prbchp:978-3-031-76654-1_4
    DOI: 10.1007/978-3-031-76654-1_4
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