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.     

How single-member districts are reinforcing local independents and strengthening mayors: on the electoral reform in Polish local government

In this article, we investigate whether the design of the electoral system used in the elections of local councils affects the position of national parties and their main competitors, local independent lists. We study the case of the electoral reform enacted recently in Poland which modified the rules of council elections by introducing the first-past-the-post (FPTP) system, quite rarely used in local elections. Using empirical evidence from the municipalities where FPTP replaced the open-list proportional representation (OLPR) system, we demonstrate that the introduction of single-member districts, and majoritarian rule in council elections, increased the number of single independents, unaffiliated to any party or committee, and limited the (already poor) presence of party candidates and councillors. The reform also strengthened the position of directly elected mayors, in Poland – usually independent, by assuring many of them safe majorities in councils. We found that the share of seats for the winning mayor’s list increased by 10 pp on average after the reform.     

Fiscal and political determinants of local government involvement in public-private partnership (PPP)

ABSTRACT

In this article, we estimate the main determinants of local government’s engagement in public-private partnership (PPP) projects using logistic panel regression. We use data from 2478 municipalities and cities in Poland from 2009 to 2016. The results show that municipalities with higher levels of indebtedness have a higher probability of opening PPP tenders while local units that are more dependent on central grants or receive more European grants are less engaged in PPP. We also found that the mayors of municipalities and cities with stronger electoral competition engage in PPP with a higher probability. These results are important for discussions on the efficient use of PPP. They show that local government decisions made in conditions of fiscal constraint and political struggle can blur the PPP’s value-for-money aim.     

Contracting Out Local Government Services to Private Agents: An Analysis of Contract Design and Service Delivery Performance in Ghana

Contracting out is generally justified on the principle that as governments contract out part of their responsibilities in service provision to private agents, they harness the power of market competition which leads to efficiency in service provision. In working with private contractors, local governments (LGs) face problems related to agent opportunism, while agents also face risks such as dereliction of payment responsibility by LGs for services delivered. The literature shows that these problems are addressed through a web of contractual arrangements. Using agency theory, this study investigates the relationship between contract design and quality of services delivery in three Ghanaian cities (Accra, Kumasi and Tema). The study found a surprising negative correlation between contract document and agents' performance. The paper concludes that effectiveness of contracting out documents depends on contract management capacity of government administrators. In its absence, LGs that contract out are exposed to risks. The paper uses the findings to reflect on the inherent deficiencies in agency theory and Africanist literature on patronage.     

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.     

The effects of fiscal decentralisation on the strength of political budget cycles in local expenditure

In this article we analyse the effects of political business cycles and fiscal decentralisation on the expenditure categories of Polish municipalities. We find convincing evidence demonstrating the impact of strong political business cycles in almost all expenditure categories, particularly for the categories of expenditure relevant to electoral success, such as infrastructure and social programmes. We find evidence that transfers to municipalities increase the strength of the electoral cycle.     

Going Local. Voting for independent local Parties in the Netherlands 1986-2010

ABSTRACT

This paper examines why the support of independent local parties has grown substantially in the Netherlands. These are parties that run in municipal council elections, but do not run in elections at higher levels, specifically the national level. Such parties saw their support double in the Netherlands between 1986 and 2010. Parties of this type have also grown in other Western European states. This paper examines two possible explanations: declining political trust on the level of voters and, on the supply side, the rise of parties that are not rooted at the local level. The evidence shows that the rise of independent local parties reflects the rise of national political parties that do not run in many municipal elections. This article examines the case of the Netherlands, pooling five surveys from the 1986–2010 period.     

Political Entrepreneurs and Public Administration Reform: The Case of the Local Authorities' Unification Reform in Israel

This article examines a specific institutional change in Israel. In 2003 the Israeli Knesset implemented the local authority unification plan, an unprecedented reform in the structure of local authorities in Israel. This article is about a local government reorganization taking place in a unique political culture. This article tries to integrate the role of political entrepreneurs within an Institutionalist and “learning” perspectives to offer an explanation to a local government structure, thus politicians influence and are influenced by a wide range of institutional norms and practices in a complex process of design and determination of institutional change.