Evidence regarding the drivers and the effects of remunicipalization remains in short supply. In this paper we exploit existing analyses of earlier historical phases of the remunicipalization of water delivery services to disentangle the role played by a range of different factors - most notably overpricing and corruption under private ownership - in the decision to remunicipalize these services. Additionally, we discuss what the effects of remunicipalization might be in the light of the, as yet, somewhat sketchy evidence. In the specific case of water tariffs, our analysis casts some doubt on whether the initial price reductions introduced following remunicipalization are sustainable over time.
Differences in corruption perception across the countries of Europe are marked and persistent over time. This study seeks to explain these differences in the countries of both the European Union and the European Free Trade Association during 2007–2017. The core hypothesis is that the style of government intervention in the economy –rather than the size of government– is the main explanatory factor for the differences. To test this hypothesis, the empirical analysis disentangles the effects of the two main government tools for intervention in the economy: taxation and regulation. The main result is that the fiscal burden does not consistently present a significant relationship with corruption. In contrast, the regulatory burden associated with excessive red tape is a strong driver of corruption, because a consistent and significant positive association is found. Furthermore, differences in legal origins, history, democratic experience and several economic factors contribute to explaining differences between European countries.
This paper analyzes Spanish infrastructure policy since the early 1700s: Road building in the eighteenth century, railway creation and expansion in the nineteenth, motorway expansion in the twentieth, and high speed rail development in the twenty-first. The analysis reveals a long-term pattern, in which infrastructure policy in Spain has been driven not by the requirements of commerce and economic activity, but rather by the desire to centralize transportation around the country's political capital.
[cat] El primer govern feixista d'Itàlia va aplicar una política de privatització a gran escala entre 1922 i 1925. El govern va privatitzar el monopoli estatal de llumins, el monopoli estatal d'assegurances de vida, va vendre la major part de la xarxa i serveis de telefònica pública a empreses privades, va reprivatitzar el major productor de productes metàl·lics, i va atorgar concessions a empreses privades per construir i explotar autopistes de peatge. Tot i que algunes consideracions ideològiques van poder tenir alguna influència, la privatització va ser usada sobre tot com un instrument polític per construir confiança amb els grans industrials i per augmentar el suport al govern i al Partito Nazionale Fascista. La privatització també va contribuir a equilibrar el pressupost públic, qüestió aquesta que va ser el principal objectiu de la primera fase de la política econòmica feixista. ; [eng] Italy's first Fascist government applied a large-scale privatization policy between 1922 and 1925. The government privatized the state monopoly of match sale, eliminated the State monopoly on life insurances, sold most of the State-owned telephone networks and services to private firms, reprivatized the largest metal machinery producer, and awarded concessions to private firms to build and operate motorways. While ideological considerations may have had a certain influence, privatization was used mainly as a political tool to build confidence among industrialists and to increase support for the government and the Partito Nazionale Fascista. Privatization also contributed to balancing the budget, which was the core objective of Fascist economic policy in its first phase.
In the 1940s, when the Governor of Puerto Rico was appointed by the US President and the Puerto Rican government was answerable only to the US Federal government, a large state-owned enterprise (SOE) sector was established on the island. Public services such as water, transportation and energy were nationalized, and several new manufacturing SOEs were created to produce cement, glass, shoes, paper and chalkboard, and clay products. These enterprises were created and managed by government-owned corporations. Later on, between 1948 and 1950, under the island's first elected Governor, the government sold these SOEs to private groups. This paper documents both the creation and the privatization of the SOE sector in Puerto Rico, and analyzes the role played by ideology, political interests, and economic concerns in the decision to privatize them. Whereas ideological factors might have played a significant role in the building of the SOE sector, we find that privatization was driven basically by economic factors, such as the superior efficiency of private firms in the sectors where the SOEs operated, and by the desire to attract private industrial investment to the Puerto Rican economy.
The Great Depression spurred State ownership in Western capitalist countries. Germany was no exception; the last governments of the Weimar Republic took over firms in diverse sectors. Later, the Nazi regime transferred public ownership and public services to the private sector. In doing so, they went against the mainstream trends in the Western capitalist countries, none of which systematically reprivatized firms during the 1930s. Privatization in Nazi Germany was also unique in transferring to private hands the delivery f public services previously provided by government. The firms and the services transferred to private ownership belonged to diverse sectors. Privatization was part of an intentional policy with multiple objectives and was not ideologically driven. As in many recent privatizations, particularly within the European Union, strong financial restrictions were a central motivation. In addition, privatization was used as a political tool to enhance support for the government and for the Nazi Party. ; Arrel de la Gran Depressió la propietat pública va créixer al països capitalistes occidentals. Alemanya no va ser una excepció; els darrers governs de la República de Weimar van agafar el control d¿empreses en diferent sectors. Més tard, el règim Nazi va transferir propietat pública i serveis públics al sector privat. Amb això, els Nazis es situaven contra les tendències habituals als països capitalistes occidentals, puix cap altre país va reprivatitzar sistemàticament en la dècada dels 1930s. La privatització a l¿Alemanya Nazi també va ser única en la mesura en què es va transferir a organitzacions privades la producció de serveis públics que abans havien estat produïts per l¿administració pública. Les empreses i serveis transferits al sector privat pertanyen a diferents sectors. La privatització va ser part d¿una política intencional amb múltiples objectius, i no va tenir un caràcter marcadament ideològic. Igual que en moltes privatitzacions recents, especialment a la Unió Europea, la motivació principal procedia de les fortes restriccions financeres dels pressupostos públics. A més, la privatització va ser usada com un instrument polític per augmentar el suport al govern i al Partit Nazi.
Inter-municipal cooperation in public service delivery has attracted the interest of local authorities seeking to reform public service provision. Cost saving, together with better quality and coordination, has been among the most important drivers of such cooperation. However, the empirical results on inter-municipal cooperation and its associated costs offer divergent outcomes. By conducting a meta-regression analysis, we seek to explain this discrepancy. We formulate several hypotheses regarding scale economies, transaction costs, and governance of cooperation. While we find no clear indications of the role played by transaction costs in the relationship between cooperation and service delivery costs, we find strong evidence that population size and governance are significant in explaining the relationship. Specifically, small populations and delegation to a higher tier of government seem to offer cost advantages to cooperating municipalities. As an extension of our model, we seek to disentangle service-related transaction costs based on asset specificity and ease of measurability of the service.
Over the last two decades, Barcelona has implemented a far-reaching reform of the city's solid waste management. In 2000, the city was divided in four zones, with four separate solid waste collection contracts being awarded to private firms, with none being allowed to obtain more than two zones, a rule that was revised in 2009 to just one contract per firm. This division of the market via exclusive territories sought to enhance competition in the expectation of the convergence of relative costs, efficiency and service quality throughout the city. Based on monthly observations of costs and outputs between 2015 and 2018, this paper analyzes and evaluates the creation of lots as a tool of competition. We find that firms producing in larger zones report higher costs, that increased competition was not sufficient to lead to converging costs, and that none of the firms operate under increasing returns to scale. As such, we recommend creating an additional zone. We further suggest that if one of the zones were to be subject to public production, and adopted a mixed delivery provision strategy, the ability of the regulator to deal with asymmetric information would improve and a more reliable system could be created.
We briefly review recent advances in the empirical analysis of the privatization and inter-municipal cooperation of local public services and discuss the potential of these studies. The core issues examined include the identification of factors driving delivery choices and the effects of privatization and cooperation on service provisions. In addition to reporting the specific empirical findings of each study, we highlight the innovative methodologies that they each adopt. Finally, we outline a number of potential avenues for further research.
Mexican President Felipe Calderón took office in December 2006. From the outset, his government deployed an aggressive security policy to fight drug trafficking organizations in what became known as the 'Mexican Drug War.' The policy earned considerable criticism since a heavy number of unintended casualties resulted from the frontal assault waged against the drug cartels. In this article, we evaluate the effects of the Mexican Drug War on Mexican states' economic growth. To do so, we study the effects of the rise in the homicide rate and changes in a state-level approximation of the military budget on economic growth. Using dynamic panel data econometrics, we find that while the growth in the number of homicides had negative and significant effects on state GDP growth, state military expenditures aimed at fighting drug trafficking had a positive and significant effect on the per capita economic growth rate.
Inter-municipal cooperation in public service delivery has attracted the interest of local authorities seeking to reform public service provision in recent years. Cost saving has been among the most important drivers of such cooperation. However, the empirical results from the literature on inter- municipal cooperation and its associated costs offer contradictory outcomes in this regard. The boom in empirical studies addressing this question over the last decade offers insights into the factors that might explain the discrepancy in reported outcomes. With this objective in mind, we conduct a meta-regression analysis that considers all existing multivariate empirical studies of this matter. We formulate several hypotheses regarding scale economies, transaction costs, and governance of cooperation, based on the prior theoretical literature. While we find no clear indications of the role played by transaction costs in the relationship between cooperation and service delivery costs, we find strong evidence that population size and governance are significant in explaining the relationship. Specifically, small populations and delegation to a higher tier of government seem to offer cost advantages to municipalities when opting to cooperate. Furthermore, we build an extension of our model by disentangling service-related transaction costs based on asset specificity and ease of measurability of the service.
Reducing the quantity of waste is an objective pursued by an increasing number of governments. Pricing waste has been one of the most important tools used for that purpose, and the literature on the demand for household waste disposal shows a wide diversity of price elasticity calculations. We explore this issue by means of a meta-analysis on a database of 25 studies. This allows us analyzing which is the effect on the results of different data, model specification and (statistical) methods. We find no evidence that either treating prices as exogenous or including curbside recycling effects in the model influence price elasticity. There are some indications that price elasticities in the USA are more elastic, and that municipal data provide higher estimates than household data. We find that much of the variation in elasticities is associated with substantial methods; in particular it can be explained by the use of a weight-based system and by the pricing of compostable waste. In contrast, the bag-based system does not present a significant relation with elasticity. Finally, our results do not find evidence of publication bias, while they do indicate some evidence of the existence of a genuine empirical effect.
Mexican President Felipe Calderón was sworn into office in December 2006. From the outset, his administration was to deploy an aggressive security policy in its fight against drug trafficking organizations (DTOs), in what became known as the Mexican 'War on Drugs'. The policy was strongly condemned because of the 68,000 unintentional deaths directly attributable to it. Here, we evaluate the economic effects of this 'War on Drugs'. To disentangle the economic effects of the policy, we study the effects of homicides and the rise in the homicide rate together with the impact of federal public security grants and state-level military expenditure on economic growth. Using spatial econometrics, we find that at the state-level the number of homicides reduced the Mexican states' GDP per capita growth by 0.20 percentage points, while the growth in the homicide rate increased the states' per capita GDP by 0.81 percentage points. The government's efforts to fight DTOs had a positive and highly significant impact on economic growth.
One of the main governance decisions that policymakers need to make is whether to implement public services via centralised or decentralised forms. As Costa et al. discuss in their manuscript, when public services are implemented via competing systems, service providers contend to provide good services with the ultimate objective of gaining market quota. This is known as managed competition (MC), as the authorities will have to manage the panoply of public and private organizations offering the service. The alternative is to manage the service more centrally, in what it is identified as vertical integration. As the authors describe, several governments around the globe have abandoned their vertical integrated models in favour of decentralized models. This is the case, as the authors recall, for most health services in Europe. While there is an emerging body of evidence suggesting that decentralized MC outperforms vertically integrated models both in terms of efficiency and in terms of service quality, little is known on how these systems react under different circumstances. This means, for example, how these systems can cope with a sudden increase in their service demands.
Empirical evidence on remunicipalization remains scarce, and even more so as regards potential differences in the roles played by politicians and bureaucrats in service delivery reform. We use information obtained from a survey of Spanish municipalities to investigate differences in the service delivery preferences of politicians and technical staff, as well as differences in their respective propensities to reform. The results we obtain suggest that bureaucrats have both a stronger preference for private participation in service delivery and for reforming services than do politicians.
