Corporatization in the Public Sector: Explaining the Growth of Local Government Companies

The creation of companies by local governments to provide public services—referred to as “corporatization”—is an example of systemic public entrepreneurship that is popular across the world. To build knowledge of the antecedents of public sector entrepreneurship, the authors investigate the factors that lead local governments to create companies for public service delivery. Using zero-inflated negative binomial regressions to analyze secondary data from 150 major English local governments for 2010–16, the authors find that governments with higher levels of grant dependence and debt dependence are more involved in the creation and operation of companies, as are larger governments. Further analysis reveals that very low and very high managerial capabilities are strongly associated with more involvement in profit-making companies, while local government involvement in companies is more prevalent in deprived areas. At the same time, government ownership of companies is more common in areas with high economic output.     

The determinants of fiscal transparency in Chinese city-level governments

ABSTRACT

The transparency of the fiscal performance of governments has attracted attention from researchers, policy-makers and practitioners around the world. This study examines the determinants of fiscal transparency in the city-level governments of China, which has become a key issue in the drive to modernise the Chinese state. Employing cross-sectional data from the 2017 Statistical Yearbooks published by the official statistical institutions and the 2017 Fiscal transparency report of city-level governments edited by the Tsinghua University, this study finds that economic development, economic openness, and dependence on transfer payments are associated with weaker fiscal transparency. Large cities, those with high levels of internet usage and cities higher up within the Chinese administrative hierarchy are associated with stronger fiscal transparency. The theoretical and practical implications of these findings are discussed.