Journal
JOURNAL OF POLICY REFORM
Volume 9, Issue 1, Pages 1-24Publisher
ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD
DOI: 10.1080/13841280500513084
Keywords
privatization; contracting-out; local government
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Recent evidence on the savings from private production of local public services has become increasingly ambiguous. Here we specify and estimate a model to explain municipal costs for solid waste collection. As we find no effect of the mode of production on costs, we put forward two hypotheses. First, progressive concentration and decreases in bidding competition may come to outweigh gains from privatization. Second, the threat of privatization may have stimulated public unit managers to search for alternative reforms. The results suggest that both inter-municipal cooperation and recent privatization are associated with lower costs, while old privatization is not.
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