Amalgamation Impacts on Local Public Expenditures in Sweden

This paper concerns amalgamation impacts on local public expenditures. The empirical analysis is based on the extensive 1952 municipal reform in Sweden. The 1952 reform amalgamated municipalities in a way that they had at least 2,000–3,500 inhabitants. This was done in the belief that larger municipalities would improve administration efficiency and public services by exploiting economies of scale. The results show that the reform had a negative impact on expenditures as long as the municipalities did not exceed a critical size.     

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.     

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.     

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.     

DOES DISPERSED PUBLIC OWNERSHIP IMPAIR EFFICIENCY? THE CASE OF REFUSE COLLECTION IN NORWAY

Corporate governance theory suggests that companies with dispersed and indirect ownership suffer from agency costs. A worst case is where several political authorities jointly own a company, which allows managers to operate with inferior efficiency. In political economy, the manager is not the major agency problem. Elected politicians may impair efficiency to improve their re‐election prospects. Since politicians have less influence in jointly owned firms, such companies are expected to perform better than those owned by a single public authority. Consistent with corporate governance – but not political economy – the empirical analysis suggests that dispersed municipal ownership impairs cost efficiency. In the Norwegian case of municipal refuse collection presented here, costs of dispersed ownership often outstrip gains from economies of scale. Use of jointly owned companies is not necessarily a proper response to efficiency problems inherent a fragmented local government structure.     

Does intermunicipal cooperation increase efficiency? A conditional metafrontier approach for the Hessian wastewater sector

ABSTRACT

This paper analyses the relationship between intermunicipal cooperation and efficiency of public service provision. Organisational arrangements of public service production, including self-provision, joint provision or contracting, affect incentives and internal transaction costs. Hence, cooperation gains from scale effects need to be balanced against technical inefficiencies. We analyse relative efficiency of wastewater disposal for German municipalities. We employ a conditional analysis in conjunction with a metafrontier approach to calculate relative efficiency measures and technology gap ratios controlling for organisational arrangements and further environmental variables. Jointly providing municipalities and contractor municipalities exhibit lower technical efficiency than self-providing and contracting municipalities. As confirmed by previous research, scale effects from cooperation and contracting apply to small municipalities primarily.     

Economies of scale and Brazilian local government expenditure: evidence from the State of Paraná

ABSTRACT

Controversy surrounds local government reform, particularly efforts directed at reducing the number of local authorities to secure economies of scale. We examine whether economies of scale exist in local government outlays by analysing the expenditure of 398 municipalities for the Brazilian state of Paraná using a 16-year panel dataset covering the period 2002–2017. We find evidence that municipal expenditure is characterised by substantial scale economies. However, given the strong correlation between population size and population density, it is important to ascertain whether the influence of population size on municipal expenditure is due to variations in population density or not. When local government areas are divided into sub-groups based on population density, evidence of scale economies remains with the majority of councils operating below optimal size. Municipal consolidations may thus lead to lower per capita expenditure.     

What have we learned from the last three decades of empirical studies on factors driving local privatisation?

Scholarly empirical studies on factors that motivate local privatisation have greatly grown in the last decade. As well, having available better and more comprehensive databases and using more refined empirical techniques have made possible to enhance our understanding of the dynamics of local privatisation, particularly in many European countries. The influence of fiscal stress, cost considerations – scale economies as well as transaction costs – and political partisan interests is usually confirmed. Furthermore, ideological attitudes appear to be more influential than they seemed to be, particularly when considering social services, rather than the technical ones.     

The history of devolution of powers to local authorities in South Africa: The shifting sands of state control

Urban waste services in Portugal have historically been provided together with other services, such as the water services. Despite the lack of discussion on this subject in the literature, some questions have been raised about the gains, in terms of efficiency, of this policy. Following a recent and robust partial nonparametric frontier model, based on order-α, we intend to evaluate the presence of economies of scope in the Portuguese waste sector. Furthermore, we also estimate the economies of scale using the traditional data envelopment analysis. The results show the absence of economies of scope between waste and water (and wastewater) services. In addition, we identify the presence of economies of scale in smaller municipalities. These outcomes might be useful for policy and decision makers in further reforms.     

Tax Collection in Developing Countries – New Evidence on Semi-Autonomous Revenue Agencies (SARAs)

Abstract

Over the last two decades, semi-autonomous revenue agencies (SARAs) have become a key element of public administration reform. They are supposed to improve revenue mobilisation and stabilise state–taxpayer relations. But do SARAs really outperform conventional tax administrations? This article argues that they do. Presenting the results of a panel analysis of local tax collection in Peru between 1998 and 2011, it shows that municipalities with SARAs collect more revenue than those with conventional tax administrations. The results also indicate that local revenue is more stable in municipalities with SARAs, which is good for budget policy and planning.     

Public Nursery School Costs and the Effects of the Funding Reforms in Japan

Using a panel dataset of 983 municipalities across Japan, this article investigates the impact of the funding reforms in 2004 on public nursery schools’ operating costs. We found that municipalities responded differently to the reforms, depending on their fiscal strength and city scale. In areas with relatively large populations, fiscally stronger municipalities were likely to spend less on public nursery schools in the wake of the reforms, while municipalities in smaller cities spent more. Besides, municipalities that were not compensated for the loss of the national subsidy reduced expenditures in large cities. In small cities, on the other hand, such municipalities actually increased expenditures.     

Contracting Out Parks and Recreation Services: Correcting for Selection Bias Using a Heckman Selection Model

Despite the growing scholarly attention on the efficiency rationale of contracting out, the empirical evidence to support claims that contracting out service delivery reduces service costs has not been forthcoming. Using transaction cost theories, this research explores park and recreation service provision costs across contractor sectors, controlling for the choice to contract out a service or not. The two-stage Heckman model indicates the importance of competitive markets and economies of scale in reducing transaction cost risk which local governments must face. This research also addresses how state and local institutional settings define the context in which policy decisions are made and implemented.     

Did the Big Stick Work? An Empirical Assessment of Scale Economies and the Queensland Forced Amalgamation Program

In 2007, the Queensland Government imposed forced amalgamation with the number of local authorities falling from 157 to just 73 councils. Amalgamation was based inter alia on the assumption that increased economies of scale would generate savings. This paper empirically examines pre- and post-amalgamation (2006/07 and 2009/10) for scale economies. For the 2006/07 data, evidence of economies of scale was found for councils with populations up to 98,000, and thereafter diseconomies of scale. Eight percent of councils in 2006/07 (ten councils) – representing 64% of the state’s population – exhibited diseconomies of scale. For the 2009/10 data, the average cost curve remained almost stationary at 99,000 residents per council, but almost 25% of all councils (thirteen councils) were now found to exhibit diseconomies of scale. The compulsory merger program thus increased the proportion of Queensland residents in councils operating with diseconomies of scale to 84%.     

Negative feedback,political attention,and public policy

More than 50 years of policy research has provided evidence of negative feedback where self‐correcting mechanisms reinforce stability in public policies over time. While such mechanisms are at the heart of understanding change and stability in public policies, little attention has been given to the responses of individual policy‐makers to public policies as a potential driver of negative feedback. Based on a unique survey dataset of spending preferences of local government politicians covering more than 90 Danish municipalities, three years, seven policy issues, and around 3,000 entries, we find that the expressed spending preferences of politicians are indeed negatively affected by previous spending levels. Moreover, such negative feedback effects are stronger, the less the political attention to the issue and even disappear at high levels of attention. Our analysis thus provides important evidence on the micro foundations and conditions of negative feedback in public policy.     

Population size or population density? An empirical examination of scale economies in South Australian local government, 2015/16

ABSTRACT

Advocates of amalgamation typically claim that substantial scale economies flow from municipal mergers, which generate larger local government entities by population size. We examined whether economies of scale exist in council outlays by analysing the expenditure of 68 South Australian local government areas using data from the 2015/16 financial year. However, given the correlation between population size and population density it is important to determine whether the influence of population size on expenditure is due to variations in population density. We find that when local government areas are stratified into subgroups on the basis of population density, the evidence of economies of scale largely evaporates. From a policy perspective, this suggests that in place of municipal mergers, policymakers should instead explore avenues for shared service arrangements in those functions which exhibit scale economies.     

Social Norms Theory,Enforcement, and Management Concepts: An Analysis of Local Smoking Ban Ordinances

Although there is substantial research on the consequences of smoking and the economic loss resulting from tobacco use, there is a scarcity of work on the enforcement of smoking ordinances at the local level. As municipalities around the country pass ordinances restricting smoking in public places, research should be conducted to understand enforcement outcomes. This article examines the management concepts being employed by managers in the enforcement of smoking ordinances. This article shows that management concepts are salient in policy enforcement and are employed to manage smoking enforcement ordinances. The theory of social norms is used to explain this phenomenon.     

Implementing sunshine and the public records laws in dade county,florida: problems and prescriptions for reform

Open meetings and public records laws are designed to make the process and product of governmental decision making more accessible to the general public. The objective of this study is to identify problems that are associated with Florida's open meetings (sunshine) and public records laws in relation to the administrative and decision making processes of local governments. The results indicate that smaller municipalities are adversely effected by advertising costs for open meetings and for unreimbursed research costs related to public records requests. A number of suggestions are proposed to remedy the identified deficiencies.     

Bridging the gap between town and gown: Local government expertise and the role of the university

This paper challenges the claim of the public administration community that universities are playing an important role in transferring public sector technology to local governments. We provide data from the Lower Mississippi Delta to show that graduate programs in public management and planning are not filling the severe expertise gap facing nonrnetropolitan counties and municipalities. The paper concludes with a series of recommendations on how universities can better fulfill their promise of technology transfer.     

THE PUBLIC MANAGEMENT CHALLENGES OF CONTRACTING WITH NONPROFITS for SOCIAL SERVICES

ABSTRACT

States and municipalities increasingly pursue privatization as a way to deliver public goods and services because of two expected outcomes, reduced costs and quality improvements. Several reasons are frequently cited for these anticipated benefits ranging from market competition to increased management flexibility and discretion to fewer rules and regulations. One policy area in which government has privatized many services through contracting with nonprofit organizations is social services. Contracted services are as diverse as providing shelters for the homeless, vocational education and job retraining, domestic violence services, refugee esettlement, child and elder abuse services, and food banks. A proliferation of public administration and nonprofit organizational scholarship has examined a range of issues associated with the government-nonprofit social service contracting relationship, not the least of which are topics related to management, measurement, and accountability. This article examines the public management challenges and implications of contracting with nonprofit organizations for the delivery of social services.     

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.