Management Discretion and Political Interference in Municipal Enterprises. Evidence from Italian Utilities

  title={Management Discretion and Political Interference in Municipal Enterprises. Evidence from Italian Utilities},
  author={Paola Garrone and Luca Grilli and Xavier Rousseau},
  journal={Local Government Studies},
  pages={514 - 540}
Abstract The attention of scholars and policy-makers is shifting from full privatisation to alternative measures as a means to improve the efficiency of public services. This article focuses on three restructuring measures adopted by local governments: partial privatisation (without transfer of control rights), inter-municipal joint ventures, and the presence of outside directors on the Board. Divergent hypotheses on these measures have emerged from two economic theories, namely public choice… 


Austerity and fiscal crisis make the search for cost-saving reforms in local government more critical. While cost savings from privatization have frequently proven ephemeral, inter-municipal

Board Composition, Political Connections and Performance in State-Owned Enterprises

This paper analyses the effects of board composition on the behaviour and performance of a sample of 114 Italian local public utilities, for which information about 1630 directors during 1994-2004

The Scope of Public Organisations with Productive Functions: Insights from the Inefficiency of Italian Local Public Transport

It is a well-known fact that reforms necessary to enhance competition and make the economy more attractive play a major role in the Government activity in Europe. Considering the Italian state of

The efficiency and effectiveness of municipally owned corporations: a systematic review

ABSTRACT Municipally owned corporations (MOCs) are increasingly utilised to provide local public services, but little remains known about their efficiency and effectiveness. In this article, we offer

Governance, strategy and innovation of utilities controlled by urban governing bodies: insights for industrial policy.

There is renewed interest in the role that utilities controlled by local public entities can play in promoting economic development, but also in the role that these firms have on the financial

Municipalities’ Choices of Service Delivery Modes: The Influence of Service, Political, Governance, and Financial Characteristics

ABSTRACT This study investigates the influence of service, political, governance, and financial characteristics on municipalities’ choices of four service delivery modes (in-house, inter-municipal

The costs of corporatization: Analysing the effects of forms of governance

Public corporations have been constantly in the spotlight, with some commentators arguing that they can help governments provide better public services, and others insisting that their governance is

Reverse Privatization as a Reaction to the Competitive Environment: Evidence from Solid Waste Collection in Germany

After earlier waves of privatization, local governments have increasingly taken back control of local service provisions in some sectors and countries and instead started providing those services

Does municipal fiscal distress hinder inter-municipal cooperation?

PurposeInter-municipal cooperation (IMC) has been increasingly adopted worldwide to tackle issues of size and cost reduction in the provision of public services. Although the determinants of



Privatization and Efficiency: From Principals and Agents to Political Economy

We survey the theoretical literature on privatization and efficiency by tracing its evolution from the applications of agency theory to recent contributions in the field of political economy. The


Corporate governance theory suggests that companies with dispersed and indirect ownership suffer from agency costs. A worst case is where several political authorities jointly own a company, which

Local Government Restructuring: Privatization and Its Alternatives

Local government restructuring should no longer be viewed as a simple dichotomy between private and public provision. A 1997 survey of chief elected township and county officials in New York shows

Ownership Versus Environment: Disentangling the Sources of Public-Sector Inefficiency

An unanswered question in the debate on public-sector inefficiency is whether reforms other than government divestiture can effectively substitute for privatization. Using a 19811995 panel data set

Why do local governments privatise public services? A survey of empirical studies

Abstract Many empirical works have been devoted to analysing the factors explaining local privatisation. Overall, most of the empirical analyses have low explanatory power due to the methodological

Privatization and Incentives

Is public or private ownership more likely to promote social welfare? This ancient and central question in economics has generated a fair amount of conventional wisdom on the benefits and costs of

Privatising Local Public Services: Between Industrial Legacy and Political Ambition

Abstract Since the 1980s, research on the privatisation of local services has analysed the factors affecting government's delivery choices; but this research has not given unanimous results, for

Do Public Sector Reforms Get Rusty? Local Privatization in Spain

Abstract 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