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

ABSTRACT

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.

KEYWORDS:

• Privatisation
• contracting out
• local public services
• empirical analysis

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. Note that the reference here is to the final published version of the study. In Bel and Fageda (2007), we reviewed a preliminary version dated 2006. The same is true of Levin and Tadelis (2010) and Zullo (2009); in both cases, we reviewed working papers dated 2005.

2. Although we conducted a careful search for newly published articles, it is highly likely that the actual number published in the last decade exceeds 32. However, as our aim here is not to conduct a meta-regression analysis, it was not necessary to ensure that we identified every single new paper – published or otherwise.

3. Bel and Fageda (2009) perform a meta-regression analysis with the same sample of studies as that used in Bel and Fageda (2007) and reach similar conclusions.

Additional information

Funding

This work was supported by the Spanish Ministry of Economy and Competitiveness under Grants ECO2015-69193-R and ECO2016-76866-R.

Notes on contributors

Germà Bel

Germà Bel is professor of economics at the University of Barcelona, where he holds the Pasqual Maragall Chair in Economy and Territory. His research has focused heavily on public sector reform, privatisation regulation and competition, with especial emphasis on local public services and infrastructure and transport. In recent years, he has devoted increasing attention to research on environmental issues.

Xavier Fageda

Xavier Fageda is an associate professor of economics at the University of Barcelona. His research has focused on privatisation in local services, competition in network industries and evaluation of public policies in infrastructure and transport.