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Mixed companies and local governance: no man can serve two masters

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  • da Cruz, Nuno F.
  • Marques, Rui Cunha

Abstract

This article looks at the use of institutionalized public–private partnership (PPP) arrangements by local governments for the delivery of different types of infrastructure. It starts by analyzing the mixed company model from a theoretical point of view, in particular the potential for internal regulation and the achievement of a relational agreement. Then, after discussing the practicalities of crafting this type of governance structure, four Portuguese case studies are examined. The empirical evidence on mixed companies operating in the water, waste, transportation, and education sectors shows that the extreme complexity involved in the whole life-cycle management of these companies usually leads to a poor protection of the public interest.

Suggested Citation

  • da Cruz, Nuno F. & Marques, Rui Cunha, 2012. "Mixed companies and local governance: no man can serve two masters," LSE Research Online Documents on Economics 59778, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:59778
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    References listed on IDEAS

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    Cited by:

    1. García-Valiñas, Maria A. & Gonzales, Francisco & Suarez, Javier & Zaporozhets, Vera, 2015. "Private Sector Involvement in Water Services: Theoretical Foundations and Empirical Evidence," TSE Working Papers 15-590, Toulouse School of Economics (TSE).
    2. Nuno Ferreira da Cruz & Pedro Simões & Rui Cunha Marques, 2013. "The hurdles of local governments with PPP contracts in the waste sector," Environment and Planning C: Government and Policy, Pion Ltd, London, vol. 31(2), pages 292-307, April.
    3. Ruiz-Villaverde, Alberto & González-Gómez, Francisco & J. Picazo- Tadeo, Andrés, 2015. "The privatisation of urban water services: theory and empirical evidence in the case of Spain," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 31, pages 157-174.
    4. Julie de Brux & Frederic Marty, 2014. "IPPP Risks and opportunities an economic perspective," Documents de Travail de l'OFCE 2014-11, Observatoire Francais des Conjonctures Economiques (OFCE).
    5. repec:eee:juipol:v:48:y:2017:i:c:p:176-183 is not listed on IDEAS
    6. repec:eee:juipol:v:48:y:2017:i:c:p:147-156 is not listed on IDEAS
    7. N.F. Cruz & R.C. Marques & A. Marra & C. Pozzi, 2014. "Local Mixed Companies: The Theory And Practice In An International Perspective," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 85(1), pages 1-9, March.
    8. Ruiz-Villaverde, Alberto & Picazo-Tadeo, Andrés J. & González-Gómez, Francisco, 2015. "The ‘social choice’ of privatising urban water services: A case study of Madrid in Spain," Journal of Policy Modeling, Elsevier, vol. 37(4), pages 616-629.
    9. repec:eee:juipol:v:48:y:2017:i:c:p:201-209 is not listed on IDEAS
    10. Cruz, Nuno Ferreira da & Carvalho, Pedro & Marques, Rui Cunha, 2013. "Disentangling the cost efficiency of jointly provided water and wastewater services," Utilities Policy, Elsevier, vol. 24(C), pages 70-77.
    11. repec:spr:waterr:v:31:y:2017:i:8:d:10.1007_s11269-016-1355-1 is not listed on IDEAS
    12. Huanming WANG & Mildred E. WARNER & Yuanhong TIAN & Dajian ZHU, 2014. "Public Owner With Business Delivery Mode In China: Case Study Of The Shanghai Public Bus System," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 85(1), pages 147-164, March.
    13. Aidan R. VINING & Anthony E. BOARDMAN & Mark A. MOORE, 2014. "The Theory And Evidence Pertaining To Local Government Mixed Enterprises," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 85(1), pages 53-86, March.
    14. Roelich, Katy & Knoeri, Christof & Steinberger, Julia K. & Varga, Liz & Blythe, Phil T. & Butler, David & Gupta, Rajat & Harrison, Gareth P. & Martin, Chris & Purnell, Phil, 2015. "Towards resource-efficient and service-oriented integrated infrastructure operation," Technological Forecasting and Social Change, Elsevier, vol. 92(C), pages 40-52.
    15. Guerrini, Andrea & Romano, Giulia, 2013. "The process of tariff setting in an unstable legal framework: An Italian case study," Utilities Policy, Elsevier, vol. 24(C), pages 78-85.
    16. Di Giulio, Marco & Galanti, Maria Tullia & Moro, Francesco Niccolò, 2016. "Political coalitions, local leaders and the internationalization of local public services in Italy," Utilities Policy, Elsevier, vol. 40(C), pages 144-151.
    17. Romano, Giulia & Guerrini, Andrea, 2014. "The effects of ownership, board size and board composition on the performance of Italian water utilities," Utilities Policy, Elsevier, vol. 31(C), pages 18-28.
    18. Francisco González-Gómez & Miguel García‐Rubio & Francisco Alcalá-Olid & M. Ortega-Díaz, 2013. "Outsourcing and Efficiency in the Management of Rural Water Services," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 27(3), pages 731-747, February.
    19. García-Valiñas, María de los Ángeles & González-Gómez, Francisco & Picazo-Tadeo, Andrés J., 2013. "Is the price of water for residential use related to provider ownership? Empirical evidence from Spain," Utilities Policy, Elsevier, vol. 24(C), pages 59-69.

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    JEL classification:

    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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