Drivers of contracting back in local governments: analysing efficiency, opportunistic political cycles, political corruption and financial factors

ABSTRACT

The main aim of this paper is to examine the likelihood of local governments remunicipalising public services that were previously contracted out. To do so, we studied a sample of 141 Spanish municipalities with between 20,000 and 50,000 inhabitants, with particular reference to contracting back operations conducted in the period 2014–2016, using a random-effects panel logit model. We found that local authorities that contracted back public services were mainly influenced by the wish to achieve higher levels of efficiency, by political behaviour in a pre-electoral year, and by political corruption detected in the previous year.

KEYWORDS:

• Contracting back
• municipal services
• political cycles
• efficiency
• political corruption

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. Article 26 of this Act lists the basic services that all local governments must provide. These vary according to the local population, but typically include street lighting, cemetery and funeral services, waste collection, access to population centres, street cleaning, drains and sewage systems and the maintenance of street infrastructure.

2. The total sample population was 141 municipalities, for which we analysed the contracting back operations that took place in 2014, 2015 and 2016. Since it only became mandatory in 2014 for municipalities to publish information about how public services were managed and provided, in order to identify the contracting back operations carried out during the study period, we were forced to compare the 2014 public service management forms with privatisation data for 1999–2011 compiled by a private company. This information provided 423 observations for analysis.

Additional information

Funding

This work was supported by the Spanish Ministry of Science and Education ECO2016-76578-R and the Spanish Ministry of Science, Innovation and Universities under Grant [FPU16/04279].