Article

Is Private Production of Public Services Cheaper Than Public Production? A Meta-Regression Analysis of Solid Waste and Water Services'

Journal of Policy Analysis and Management (Impact Factor: 0.93). 06/2010; 29(3):553-577. DOI: 10.2307/40802088
Source: RePEc

ABSTRACT

Privatization of local government services is assumed to deliver cost savings, but empirical evidence for this from around the world is mixed. We conduct a meta-regression analysis of all econometric studies examining privatization of water distribution and solid waste collection services and find no systematic support for lower costs with private production. Differences in study results are explained by differences in time period of the analyses, service characteristics, and policy environment. We do not find a genuine empirical effect of cost savings resulting from private production. The results suggest that to ensure cost savings, more attention be given to the cost characteristics of the service, the transaction costs involved, and the policy environment stimulating competition, rather than to the debate over public versus private delivery of these services. © 2010 by the Association for Public Policy Analysis and Management.

Download full-text

Full-text

Available from: Germa Bel
    • "It is clear, however, that the institutional setting in which delegation takes place is vital to delegation's success or failure. These findings are in keeping with earlier, though still scarce, overview studies and meta analyses (Bel, Fageda, and Warner 2010; Dan 2014; Hodge 2000; Letza, Smallman, and Sun 2004; Pollitt and Dan 2013). "

    No preview · Article · Nov 2015 · Public Management Review
    • "Another example is Domberger & Jensen (1997), who report that the most frequent saving in costs is between 10 and 20 %. On the contrary, Bel et al. (2010) conduct a meta-regression analysis of 27 econometric studies from 1965 to 2010 examining privatization for water distribution and solid waste collection services and find no systematic support for lower costs with private production. "
    [Show abstract] [Hide abstract]
    ABSTRACT: Recent years have seen Spain and many other developed countries move more and more into outsourcing public service management on the grounds that production costs are higher in the public sector than in the private. However, there is often no empirical support that this is always the case. This paper shows that the private sector is not always more economical or better managed than the public one and, to the best of our knowledge, such a study had never been made in Spain. It draws on a survey by the Spanish Court of Auditors for a sample of municipalities, which analyzes public services like drinking water supply, street lighting, street cleaning and urban solid waste collection. Only in the case of lighting is private management cheaper and more efficient, although in larger municipal populations the opposite is true.
    No preview · Article · Mar 2015 · Lex Localis
    • "school or hospital performance). These targets represent attempts by the state to create competition and new incentive structures through 'internal markets' that will reward performance rather than job status, encouraging all service providers from managers to frontline staff to 'up-their-game' (Bel et al., 2010Bel et al., , 2013 Crouch, 2011). As Whitfield (2010a) points out, such pseudo-markets, or market proxies, are also meant to ensure that service providers have 'correct' information about the service demands of users – now conceived of as 'consumers' – so that they can respond effectively and flexibly to users and their changing demands. "
    [Show abstract] [Hide abstract]
    ABSTRACT: Increasingly, governments are experimenting with ways to provide public goods by involving the private sector in the planning, financing, building and operating of a range of services, facilities, infrastructure, etc. In the geographical literature on neoliberalism this entanglement of the state and markets has been loosely conceptualized as a process of marketization. This concept describes the insertion of markets or market forces into the state and public sector. In this paper we unpack this concept by highlighting the need to think about a range of marketization processes at play across a range of geographies.
    No preview · Article · Mar 2015 · Progress in Human Geography
Show more