Pricing joint use of municipal services: Theoretical perspectives and regulatory issues

This paper analyses price regulation of inter‐municipal contracts in Finland to demonstrate interpretative problems of regulatory rules specifying full‐cost or market prices and, by so doing, deepen understanding of the theoretical underpinnings for pricing collaborative municipal services. It consi...

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Bibliographic Details
Published in:Financial accountability & management 2019-02, Vol.35 (1), p.20-36
Main Authors: Valkama, Pekka, Bailey, Stephen J.
Format: Article
Language:English
Subjects:
Collaboration
full‐cost pricing
inter‐municipal contracting
joint use
market pricing
public procurement
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Summary:This paper analyses price regulation of inter‐municipal contracts in Finland to demonstrate interpretative problems of regulatory rules specifying full‐cost or market prices and, by so doing, deepen understanding of the theoretical underpinnings for pricing collaborative municipal services. It considers how to price inter‐municipal services taking into account the specific socio‐economic nature of inter‐municipal cooperation, including both financial and non‐financial objectives, through a new joint‐use pricing model of municipal services that challenges the supremacy of full‐cost pricing requirements in cases of inter‐municipal collaborative contracting. Acknowledging limitations and benefits, it concludes European Single Market rules militate against municipal discretion and localism.
ISSN:0267-4424
1468-0408
DOI:10.1111/faam.12180