Do Public Sector Reforms Get Rusty? Local Privatization in Spain

Recent evidence on the savings from private production of local public services has become increasingly ambiguous. Here we specify and estimate a model to explain municipal costs for solid waste collection. As we find no effect of the mode of production on costs, we put forward two hypotheses. First...

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Bibliographic Details
Published in:The journal of policy reform 2006-03, Vol.9 (1), p.1-24
Main Authors: Bel, Germà, Costas, Antón
Format: Article
Language:English
Subjects:
contracting-out
Costs
Economic policy
Empirical research
Local government
Policy studies
Privatization
Public sector
Public services
Reform
Spain
Subcontracting
Surveys
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Summary:Recent evidence on the savings from private production of local public services has become increasingly ambiguous. Here we specify and estimate a model to explain municipal costs for solid waste collection. As we find no effect of the mode of production on costs, we put forward two hypotheses. First, progressive concentration and decreases in bidding competition may come to outweigh gains from privatization. Second, the threat of privatization may have stimulated public unit managers to search for alternative reforms. The results suggest that both inter-municipal cooperation and recent privatization are associated with lower costs, while old privatization is not.
ISSN:1384-1289
1477-2736
DOI:10.1080/13841280500513084