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Political economy of municipal water service privatization in Spain: a duration model analysis


  • Antonio Miralles

    (Universitat de Barcelona)


This empirical work applies a duration model to the study of factors determining privatization of local water services. I assess how factors determining privatization decision evolve as time goes by. A sample of 133 Spanish municipalities during the six terms of office taken place during the 1980-2002 period is analyzed. A dynamic neighboring effect is hypothesized and successfully tested. In a first stage, private water supply firms may try to expand to regions where there is no service privatized, in order to spread over this region after having being installed thanks to its scale advantages. Other factors influencing privatization decision evolve during the two decades under study, from the priority to fix old infrastructures to the concern about service efficiency. Some complementary results regarding political and budgetary factors are also obtained.

Suggested Citation

  • Antonio Miralles, 2005. "Political economy of municipal water service privatization in Spain: a duration model analysis," Working Papers in Economics 133, Universitat de Barcelona. Espai de Recerca en Economia.
  • Handle: RePEc:bar:bedcje:2005133

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    References listed on IDEAS

    1. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
    2. Germa Manel Bel Queralt & Antonio Miralles, 2002. "Factors influencing privatization of urban solid waste collection: some evidence from Spain," Working Papers in Economics 74, Universitat de Barcelona. Espai de Recerca en Economia.
    3. Suzanne Reimer, 1999. "Contract Service Firms in Local Authorities: Evolving Geographies of Activity," Regional Studies, Taylor & Francis Journals, vol. 33(2), pages 121-130.
    4. Claude Ménard & Stéphane Saussier, 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.
    5. Jenkins, Stephen P, 1995. "Easy Estimation Methods for Discrete-Time Duration Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(1), pages 129-138, February.
    6. Oliver Hart & Andrei Shleifer & Robert W. Vishny, 1997. "The Proper Scope of Government: Theory and an Application to Prisons," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1127-1161.
    7. S J Bailey & C Davidson, 1999. "The purchaser - provider split: theory and UK evidence," Environment and Planning C: Government and Policy, Pion Ltd, London, vol. 17(2), pages 161-176, April.
    8. repec:hrv:faseco:30727607 is not listed on IDEAS
    9. Bivand, Roger & Szymanski, Stefan, 1997. "Spatial dependence through local yardstick competition:: theory and testing," Economics Letters, Elsevier, vol. 55(2), pages 257-265, August.
    10. Bivand, Roger & Szymanski, Stefan, 2000. "Modelling the spatial impact of the introduction of Compulsory Competitive Tendering," Regional Science and Urban Economics, Elsevier, vol. 30(2), pages 203-219, March.
    11. Bruno Biais & Enrico Perotti, 2002. "Machiavellian Privatization," American Economic Review, American Economic Association, vol. 92(1), pages 240-258, March.
    12. repec:hrv:faseco:30727606 is not listed on IDEAS
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    Cited by:

    1. Germà Bel & Xavier Fageda, 2009. "Factors explaining local privatization: a meta-regression analysis," Public Choice, Springer, vol. 139(1), pages 105-119, April.
    2. Germa Bel & Xavier Fageda, 2008. "Reforming the local public sector: economics and politics in privatization of water and solid waste," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 11(1), pages 45-65.
    3. Xavier Fageda & Germa Bel, 2008. "Local privatization, intermunicipal cooperation,transaction costs and political interests: Evidence from Spain," IREA Working Papers 200804, University of Barcelona, Research Institute of Applied Economics, revised Apr 2008.

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