Beyond privatisation and cost savings: alternatives for local government reform

ABSTRACT

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.

KEYWORDS:

• Privatisation
• inter-municipal cooperation
• mixed public/private delivery
• contract reversals
• unionisation

Revisited series

In the Revisited Series, Local Government Studies offers short updates of some of the journal’s most cited articles of recent years. In these updates, the authors reflect on changes since their original contribution, while underlining the continuing relevance of the thinking behind the latter and indicating the direction in which this could be extended in the future.

Here, Germà Bel, Robert Hebdon and Mildred Warner revisit an article they published in 2007 in LGS Vol. 33 No. 4: ‘Local government reform: privatisation and its alternatives’. In that article, they discussed the then existing empirical literature on the effects of privatisation and analysed how disappointment with cost savings and the challenges posed by contract management were leading local government policymakers to explore alternatives to privatisation, including municipal corporations, mixed delivery, contract reversals and relational contracting. The main conclusion of their analysis was that there was a need for a more comprehensive framework within which to study local government reform, giving attention to a wider array of alternatives. Here, they return to the issues raised in that paper, and discuss the main developments that have emerged as alternatives to local privatisation since 2007.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This work was supported by the Spanish Ministry of Economy and Competitiveness [under Grant ECO2016-76866-R], and the US Department of Agriculture, National Institute of Food and Agriculture [Grant # #2017-67023-26226]; National Institute of Food and Agriculture [2017-67023-26226]; Secretaría de Estado de Investigación, Desarrollo e Innovación [ECO2016-76866-R].

Notes on contributors

Germà Bel

Germà Bel is Professor of Economics at University of Barcelona. His research focuses on public sector reform, privatisation regulation and competition, with special emphasis on local public services, infrastructure, environment and transport.

Robert Hebdon

Robert Hebdon is Professor Emeritus, Organizational Behavior at McGill University’s Faculty of Management, where his research focuses on dispute resolution, privatisation and workplace conflict.

Mildred Warner

Mildred Warner is Professor of City and Regional Planning at Cornell University in New York, USA. Her research focuses on local government service delivery, fiscal stress and policies related to economic development, the environment and social services.