Bridging the accountability and transparency gap in inter-municipal collaboration

Municipal governments are increasingly showing interest in inter-municipal cooperation. Often overlooked in the discussion of such collaborative relationships are concerns related to accountability and transparency. In this article, we introduce a framework to measure accountability and transparency in inter-local relationships and test it with a brief case study of inter-municipal cooperative agreements collected from the Greater Toronto Area. Overall, the agreements collected score very low on our accountability scale, mainly because of low levels of public access and poor internal accountability. We conclude the study by examining the challenges of having multiple lines of accountability in local service collaboration.     

Is cooperation cost reducing? An analysis of public–public partnerships and inter-municipal cooperation in Brazilian local government

ABSTRACT

In local government systems worldwide, financial pressures have obliged local authorities to focus on cost-efficient methods for providing local services, including inter-municipal agreements and public–public partnerships. However, in comparison with municipal mergers, privatisation and other approaches to the problem, the cost impact of the cooperative provision has not yet been thoroughly examined empirically. Moreover, available empirical research has largely concentrated on waste disposal in developed countries. The present paper seeks to contribute to the empirical literature on inter-municipal agreements and public–public partnerships by comparing their impact on costs with ‘stand-alone’ provision in a range of non-waste local services. In contrast to the bulk of existing studies, our analysis takes place in a developing country context by examining Brazilian local government over the period 2013/15. We found that – on the whole – cooperative provision is less expensive than the ‘stand-alone’ provision for the services studied. Our results can be explained by the size and composition of the population, together with the politics for cooperation.     

Management Discretion and Political Interference in Municipal Enterprises. Evidence from Italian Utilities

The attention of scholars and policy-makers is shifting from full privatisation to alternative measures as a means to improve the efficiency of public services. This article focuses on three restructuring measures adopted by local governments: partial privatisation (without transfer of control rights), inter-municipal joint ventures, and the presence of outside directors on the Board. Divergent hypotheses on these measures have emerged from two economic theories, namely public choice and the agency perspective. An empirical analysis investigates the effects of restructuring processes on a sample of Italian municipal utilities. Partial privatisation has been shown to play a significant and positive role, while Board independence from management has a less significant influence. Multi-government utilities have been found to suffer from severe coordination costs, which are not outweighed by scale benefits. Our findings reveal that management discretion is a significant source of inefficiency in municipal enterprises.     

Shared services in Brazilian local government: Urban development in small counties

In this article we break new ground by investigating cooperative agreements in urban development services, which include urban development, housing and sanitation for small local governments in Brazil (i.e., those with fewer than 20,000 residents in 2013–15). We find that public expenditure on urban development can be explained by both horizontal (intermunicipal cooperation) and vertical (public–public partnerships) cooperation. Regarding the impact of public sector cooperation on public expenditure, our results show that housing and sanitation services are less costly under intermunicipal cooperation. By contrast, urban development services are less costly when local authorities do not cooperate with other public entities. For public–public partnerships (with the state or federal government) cooperation leads to an increase in public funding, which implies that cooperative agreements might not lead to lower public expenditure. The findings in this article provide useful empirical insights into the administrative reorganization of Brazilian local government.     

Remapping the State: Inter-Municipal Cooperation through Corporatisation and Public-Private Governance Structures

The institutional setting of regional and local government in Italy appears to be characterised by an ongoing process of reform and adjustment ever since Regions were created in 1970. More recently, provinces and Municipalities gained wide autonomy in 1990, and the constitution itself was revised in 2001 to set up what is sometimes referred to as a ‘quasi-federal’ system of intergovernmental relations. In this context, inter-municipal cooperation also has witnessed several phases and dynamics, ranging from (very rare) fusions, through single-purpose cooperation, to integrated service management (Public-public partnership, and consortia for the management and/or regulation of public utilities). More recently, and most notably over the past decade, inter-municipal cooperation has taken on a new form, consisting in the shared ownership in joint-stock companies. The so-called ‘corporatisation’ of public bodies, i.e. the creation of public-owned (or mixed public-private), private-law companies and corporations for the fulfilment of public-interest activities, has come to constitute a network of inter-municipal cooperation that appears to represent a shift from an institutional intergovernmental structure of cooperation, to one that is pre-eminently played out in the arenas of public-private forms of governance. The article analyses the literature and overarching trends in inter-municipal cooperation in Italy, and draws on very rich original data on the companies owned by Municipalities in six Italian regions to show how these companies represent the locus of inter-municipal (and multi-level) relations that go well beyond the formal boundaries of local administrations, and are often brokered by powerful private partners.     

Privatisation,contracting-out and inter-municipal cooperation: new developments in local public service delivery

ABSTRACT

We briefly review recent advances in the empirical analysis of the privatisation 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 privatisation 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.     

Beyond privatisation and cost savings: alternatives for local government reform

Unsatisfactory results from privatisation have caused local governments to seek alternative reforms. Inter-municipal cooperation, mixed public/private delivery and contract reversals are three alternatives that have gained traction in the last decade. These alternatives help local governments manage markets for public service delivery as a dynamic process. They maximise government/market complementarities and address a wider array of public goals beyond cost efficiency concerns. The alternative reforms show how local governments balance citizen, labour and community interests to ensure efficiency, coordination and stability in public service delivery.     

Inter-Municipal Cooperation and Satisfaction with Services: Evidence from the Norwegian Citizen Study

We investigate the effects of inter-municipal cooperation on citizen satisfaction with fire services and refuse handling. While there is a growing interest in cooperation as a way of providing municipal services, little is known of the effect on citizen satisfaction. Through a multilevel analysis combining individual and municipal data, we find that inter-municipal cooperation has a negative effect on satisfaction with fire services, no effect on refuse collection but a positive effect on satisfaction with source separation. The results, we argue, show how the organizational form may affect satisfaction in different ways depending on service characteristics.     

Drivers and barriers of inter-municipal cooperation in health services – the Norwegian case

Inter-municipal cooperation in service delivery is widespread, as is the notion that this type of cooperation is primarily driven by economies of scale. However, the empirical results appear to be inconclusive, suggesting that additional explanatory factors are needed to explain why municipalities cooperate. This study aimed to identify the factors and conditions that influence the level of inter-municipal cooperation in health services by exploring a broad set of explanatory factors that go beyond simple economic concerns. In addition to confirming that a small population-size and fiscal stress constitute important drivers of inter-municipal cooperation, the results from this study also demonstrates the need to consider geographical location and heterogeneity relative to neighbouring municipalities as potential barriers to such cooperation.     

PRAGMATIC MUNICIPALISM: LOCAL GOVERNMENT SERVICE DELIVERY AFTER THE GREAT RECESSION

Since the Great Recession, some have argued that local governments have become ‘austerity machines’ that cut and privatize services and undermine unions. We conducted a national survey of US municipalities in 2012 to examine how service provision level and delivery methods are related to local stress and capacity, controlling for community need and place characteristics. We find that local governments are balancing the pressures of stress with community needs. They use alternative revenue sources and service delivery methods (privatization and cooperation) to maintain services. Unionization is not a barrier to innovation. Further, we find that ethnically diverse suburbs are providing more services than other suburbs, thus acting more like metro core cities. We find that the Great Recession has not dramatically shifted local government behaviour to a ‘new normal’ of fiscal austerity. Instead, we find municipalities practising ‘pragmatic municipalism’ to maintain their public role.     

Absence of Vertical Linkages and the Quest for Decentralized Service Delivery in Pakistan: An Innovation under Constraints

Local Government Ordinance, 2001 aimed to create a service-orientated local government by devolving many public services from the provincial to local levels. However, in many cases, local governments either did not have the capacity to manage them or the services extended across different geographic jurisdictions. The new system also restructured the three sub-national levels but without any vertical hierarchical linkages between them, and asked them to coordinate public service provision between them. This article suggests different remedies, including developing vertical administrative linkages and the reconstitution of Zila Mushawarat Committee to undertake coordination functions at intra-district level.     

What Should We Do? Public Attitudes about How Local Government Officials Should Confront Fiscal Stress

Despite strong scholarly interest in the topic of fiscal stress, little attention has been paid to understanding how the general public thinks local governments should respond to situations where declining revenues endanger service levels. This study reports findings from a survey of 660 residents undertaken between November 2006 and January 2007 in the US state of Michigan to examine their support for eight potential strategies to cope with fiscal stress in five different local government services. We find that the public has a surprisingly nuanced perspective about these strategies and on their use for different services. Our findings may provide local policymakers with some insights about how to respond to fiscal stress.     

Why Do Municipalities Cooperate to Provide Local Public Services? An Empirical Analysis

Intermunicipal cooperation is being increasingly adopted in various countries as a part of local service delivery reforms. This article draws on survey data from Spain's municipalities to examine the reasons underpinning the decisions of local governments to engage in intermunicipal cooperation and privatisation. Our empirical analysis indicates that small municipalities prefer to rely on cooperation for reducing costs, while their larger counterparts prefer to privatise the delivery of services. By cooperating, scale economies can be achieved with lower transaction costs and fewer concerns for competition than is the case via private production.     

COMPETITION OR MONOPOLY? COMPARING PRIVATIZATION OF LOCAL PUBLIC SERVICES IN THE US AND SPAIN

Differences in national traditions of public intervention, institutional arrangements and public service markets make local public services an area of great diversity. In this paper we undertake a comparative study of how local governments arrange for delivery of water and waste services in the US and Spain. We find levels of privatization are higher in Spain than in the US. We review organizational reform in the two contexts and compare service delivery data using national surveys from each country. We find lower and less stable privatization in the US stems in part from adherence to public choice emphasis on the benefits of market competition over public monopoly. By contrast, Spanish municipalities reflect an industrial organization approach, and create hybrid public/private firms which benefit from both market engagement and economies of scale available under monopoly production. We conclude that managing monopoly may be more important than competition in local service delivery.     

Evaluating local government performance in times of crisis

In recent years, Spanish local governments have come under increasing pressure to accommodate severe economic restrictions while maintaining their provision of local public services. We analyse overall cost efficiency in Spanish local governments during the period of the economic crisis (2008–2013), under four different non-parametric methodologies. Moreover, given how problematic it is to precisely define what municipalities do, we compare three different output models with various measures of quantity as well as quality. Results suggest that Spanish local government efficiency improved over the period 2008–2013 since budget expenditures (inputs) fell while local public services and facilities (outputs) were maintained. We also find evidence of the possible implications of service quality when measuring municipalities’ efficiency, and of structural differences in the average efficiency between municipalities located in different Spanish regions. Finally, our results confirm that the level and variation of efficiency scores are affected by the approach taken.     

Towards Performance,Quality and Environmental Management in Local Government: the Case of Spain

The search for improvements in the management and quality of public services seems to be a constant in all public administrations, and there is an ever-increasing use of management techniques and models from the business sector. The aim of this paper is to show which management systems are being used by Spanish local governments to improve their management in terms of economy, quality and the environment. Our analysis is based on a questionnaire sent to Spanish local governments about the tools they use and the factors that influence their implementation. The results show that more efforts are necessary to implement performance measurement and total quality management, but they also show some positive aspects, such as the usefulness of performance measurement and its application to decisions in those local governments that have implemented it.     

LEARNING FROM SUCCESS: ARE SUCCESSFUL GOVERNMENTS ROLE MODELS?

Do local governments learn from their successful peers when designing public policies? In spite of extensive research on policy diffusion and learning, there is still a lack of studies on how success relates to learning patterns. We address this deficiency by examining which other governments local administrative units draw lessons from. More precisely, we investigate whether public managers learn from the experiences of local governments whose citizens are satisfied with government services. Using a large dyadic dataset on all Swedish municipalities from 2010, we find that senior public managers in local administrations learn from similar local governments and from neighbours. But we also find clear evidence that they learn from local governments whose citizens are pleased with local public services. This indicates that best practices are spread among local governments.     

Internal or External Production and Satisfaction with the Chosen Sourcing in Danish Municipalities: Different Theoretical Explanations

Abstract

There is a large literature on both why local governments and public organisations choose internal or external production of services and what explains the performance of internal and external production. A range of different theories have been used to answer these questions. However, these studies show mixed results. In this study we investigate four theories: transaction cost economics, neoclassical economics, the resource-based view of strategy and institutional theory. Can these theories explain whether local governments choose internal or external production and can they explain the satisfaction with the internal and external production? Do the same variables explain the choice and the satisfaction? Based on a survey of four different service areas in Danish municipalities, it is shown that different theoretical variables explain the choice and satisfaction with the sourcing mode. Internal expertise is strongly related to the choice of internal or external production, whereas most transaction cost variables are unrelated to this choice. However, other variables such as supplier expertise and technological uncertainty are related to satisfaction with service production. The results corroborate the view that different variables are needed for explaining the performance of suppliers and the choice between internal and external suppliers. Furthermore, the results suggest that the study of local governments' sourcing may benefit from integrating theories focusing on internal expertise and markets. Studies may also benefit from integrating economic theories, which assume rationality, with institutional theory emphasising more unreflective and socially determined behaviour.     

Municipal Service Delivery: The Role of Transaction Costs in the Choice between Alternative Governance Mechanisms

Service provision by local governments can be delivered using in-house bureaucracies, private firms, and partnerships with other governments or the not-for-profit sector. This production decision has been a major focus of discussion among scholars, practitioners and political agents for the last quarter of a century. The transaction costs framework is an important tool to analyse decisions regarding the production of local services. In this paper, the authors employ this framework to analyse service delivery in Portugal and find that service characteristics and the local political environment play a key role in local officials' choice among the three governance mechanisms to deliver public services.     

SIMILAR PROBLEMS,DIFFERENT SOLUTIONS: COMPARING REFUSE COLLECTION IN THE NETHERLANDS AND SPAIN

Because of differences in institutional arrangements, public service markets, and national traditions regarding government intervention, local public service provision can vary greatly. In this paper we compare the procedures adopted by the local governments of The Netherlands and Spain in arranging for the provision of solid waste collection. We find that Spain faces a problem of consolidation, opting more frequently to implement policies of privatization and cooperation, at the expense of competition. By contrast, The Netherlands, which has larger municipalities on average, resorts somewhat less to privatization and cooperation, and more to competition. Both options—cooperation and competition—have their merits when striving to strike a balance between transaction costs and scale economies. The choices made in organizational reform seem to be related to several factors, among which the nature of the political system and the size of municipalities appear to be relevant.