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Choosing hybrid organizations for local servicesdelivery: An empirical analysis of partial privatization

  • Xavier Fageda

    ()

    (Faculty of Economics, University of Barcelona)

  • Germa Bel

    ()

    (Faculty of Economics, University of Barcelona)

The empirical literature about factors explaining local government delivery choices has traditionally focused the attention on the public or private production dilemma. However, hybrid organizational forms such as mixed public-private firms are increasingly used in several European countries. This paper makes use of survey data from Spanish municipalities to examine motivations of local governments for engaging in hybrid organizational forms. Data refer to two very relevant local services: water distribution and solid waste collection. The empirical analysis indicates that the use of mixed firms emerge as a type of pragmatically based ‘third way’ between pure public and pure private production. Indeed, local governments make use of mixed firms when cost considerations (scale economies, transaction costs and so on), financial constraints and private interests exert contradictory pressures. On the contrary, political and ideological factors do not play any significant role on the local government decision of engaging or not in joint ventures with private partners.

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File URL: http://www.ub.edu/irea/working_papers/2008/200803.pdf
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Paper provided by University of Barcelona, Research Institute of Applied Economics in its series IREA Working Papers with number 200803.

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Length: 21 pages
Date of creation: Apr 2008
Date of revision: Apr 2008
Handle: RePEc:ira:wpaper:200803
Contact details of provider: Postal: Tinent Coronel Valenzuela, Num 1-11 08034 Barcelona
Web page: http://www.ub.edu/irea/

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  1. Williamson, Oliver E, 1999. "Public and Private Bureaucracies: A Transaction Cost Economics Perspective," Journal of Law, Economics and Organization, Oxford University Press, vol. 15(1), pages 306-42, April.
  2. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-95, December.
  3. E. Dijkgraaf & R. H. J. M. Gradus, 2005. "Collusion in the Dutch waste collection market," Industrial Organization 0502006, EconWPA.
  4. Patrick W. Schmitz, 2000. "Partial Privatization and Incomplete Contracts: The Proper Scope of Government Reconsidered," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 57(4), pages 394-411, August.
  5. Oliver Hart & Andrei Shleifer & Robert W. Vishny, 1996. "The Proper Scope of Government: Theory and an Application to Prisons," NBER Working Papers 5744, National Bureau of Economic Research, Inc.
  6. Martin J. Osborne & Al Slivinksi, 1995. "A Model of Political Competition with Citizen-Candidates," Department of Economics Working Papers 1995-01, McMaster University.
  7. Dijkgraaf, E. & Gradus, R.H.J.M., 2007. "How to get increasing competition in the Dutch refuse collection market?," Serie Research Memoranda 0019, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  8. Tim Besley & Stephen Coate, . "An Economic Model of Representative Democracy," Penn CARESS Working Papers ecf70d639d700dba5327ab0c8, Penn Economics Department.
  9. Elbert Dijkgraaf & Raymond H J M Gradus, 2008. "Institutional developments in the Dutch waste-collection market," Environment and Planning C: Government and Policy, Pion Ltd, London, vol. 26(1), pages 110-126, February.
  10. 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.
  11. Germa Bel & Anton Costas, 2006. "Do Public Sector Reforms Get Rusty? Local Privatization in Spain," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 9(1), pages 1-24.
  12. 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.
  13. Jonathan Levin & Steven Tadelis, 2007. "Contracting for Government Services: Theory and Evidence from U.S. Cities," NBER Working Papers 13350, National Bureau of Economic Research, Inc.
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