IDEAS home Printed from https://ideas.repec.org/a/rse/wpaper/v24y2022i2p46-57.html
   My bibliography  Save this article

Public–Private Partnerships and Their Limitations in Sustainable Public Sewerage Industry: A Comparative Analysis of Three Municipal Cases in Japan

Author

Listed:
  • Naoki Fujiwara

    (Otemon Gakuin University, Japan)

Abstract

Since the mid-1980s, many public water and sewerage business reforms have been carried out in countries around the world in the form of privatization and the introduction of market systems. In Japan, municipalities operate sewerage businesses as a public service, and their revenues are expected to decline in future due to a decrease in population and the deterioration of existing facilities and equipment. Therefore, in this study, we investigated the administrative reform of the public sewerage businesses in Japan as a means of increasing business efficiency and achieving sustainable management. For our research method, we conducted a case study of three advanced municipal sewerage business reforms, which were aimed at introducing outsourcing through long-term concessions, but two were abandoned by the local councils in the middle of the process. The research shows that the limiting factors for these sewerage business reforms include the uncertainty regarding the required investment for heavy rain and earthquake countermeasures. With growing awareness of disaster prevention and mitigation, municipalities are expected to mobilize maximum resources in an emergency. Furthermore, facilities that were constructed in the 1960s to meet the needs of a growing urban population have deteriorated and become an "unmeasurable risk." The second point is the uncertainty about the amount and duration of the central government subsidies provided to municipalities. Due to growing interest in environmental changes caused by global warming, severe weather events attract greater public attention. New capital investment is required to strengthen the capacity of sewerage systems, especially in densely populated urban areas. Under the principle that rainwater treatment is a public expense, about half of the construction cost of sewerage facilities for rainwater is subsidized by the central government. This is a customary yet unstable fiscal policy, making it an uncertain factor in implementing long-term public–private partnership projects.

Suggested Citation

  • Naoki Fujiwara, 2022. "Public–Private Partnerships and Their Limitations in Sustainable Public Sewerage Industry: A Comparative Analysis of Three Municipal Cases in Japan," Review of Applied Socio-Economic Research, Pro Global Science Association, vol. 24(2), pages 46-57, December.
    • Handle: RePEc:rse:wpaper:v:24:y:2022:i:2:p:46-57
    as

    Download full text from publisher

    File URL: http://reaser.eu/RePec/rse/wpaper/REASER24_04Naoki_P46-57.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Timo TREMML, 2019. "Linking Two Worlds? Entrepreneurial Orientation In Public Enterprises: A Systematic Review And Research Agenda," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 90(1), pages 25-51, March.
    2. Oliver Hart, 2003. "Incomplete Contracts and Public Ownership: Remarks, and an Application to Public-Private Partnerships," Economic Journal, Royal Economic Society, vol. 113(486), pages 69-76, March.
    3. Kathryn Furlong, 2012. "Good Water Governance without Good Urban Governance? Regulation, Service Delivery Models, and Local Government," Environment and Planning A, , vol. 44(11), pages 2721-2741, November.
    4. Olivia Jensen, 2017. "Public–private partnerships for water in Asia: a review of two decades of experience," International Journal of Water Resources Development, Taylor & Francis Journals, vol. 33(1), pages 4-30, January.
    5. Sylvia CESAR, 2019. "Privatization Of Water: Evaluating Its Performance In The Developing World," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 90(1), pages 5-23, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Naoki FUJIWARA, 2019. "International City Network and Public-Private Cooperation Japanese Public Water Services’ Overseas Expansion," CIRIEC Working Papers 1909, CIRIEC - Université de Liège.
    2. Naoki Fujiwara, 2019. "International City Network and Public-Private Cooperation for Urban Water-Environment Management: A Study of Japanese Public Water Services’ Overseas Expansion," Review of Applied Socio-Economic Research, Pro Global Science Association, vol. 18(2), pages 19-29, December.
    3. David Martimort & Flavio Menezes & Myrna Wooders & ELISABETTA IOSSA & DAVID MARTIMORT, 2015. "The Simple Microeconomics of Public-Private Partnerships," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 17(1), pages 4-48, February.
    4. Yukari Fukuda & Jun-ichi Nakamura, 2021. "Economic Analysis of Public-Private Partnerships in Japan: Theoretical and Empirical Analyses Focusing on Adverse Selection and Synergy Effect," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 17(2), pages 1-27, November.
    5. Anna Matas & Ginés de Rus & Stef Proost & Salvador Bertoméu-Sánchez & Antonio Estache, 2018. "The Financing of Infrastructure / La financiación de las infraestructuras / El finançament de les infraestructures," IEB Reports ieb_report_1_2018, Institut d'Economia de Barcelona (IEB).
    6. Elisabetta Iossa & David Martimort, 2012. "Risk allocation and the costs and benefits of public--private partnerships," RAND Journal of Economics, RAND Corporation, vol. 43(3), pages 442-474, September.
    7. Patrick W. Schmitz, 2005. "Allocating Control in Agency Problems with Limited Liability and Sequential Hidden Actions," RAND Journal of Economics, The RAND Corporation, vol. 36(2), pages 318-336, Summer.
    8. Galilea, Patricia & Medda, Francesca, 2010. "Does the political and economic context influence the success of a transport project? An analysis of transport public-private partnerships," Research in Transportation Economics, Elsevier, vol. 30(1), pages 102-109.
    9. P.W.J. de Bijl & Helanya Fourie, 2019. "The energy transition: Does ownership matter for realizing public interest objectives?," Working Papers 19-24, Utrecht School of Economics.
    10. Antonio Sánchez Soliño, 2019. "Sustainability of Public Services: Is Outsourcing the Answer?," Sustainability, MDPI, vol. 11(24), pages 1-12, December.
    11. Hoppe, Eva I. & Kusterer, David J. & Schmitz, Patrick W., 2013. "Public–private partnerships versus traditional procurement: An experimental investigation," Journal of Economic Behavior & Organization, Elsevier, vol. 89(C), pages 145-166.
    12. Zabaloy, Maria Florencia & Viego, Valentina, 2022. "Household electricity demand in Latin America and the Caribbean: A meta-analysis of price elasticity," Utilities Policy, Elsevier, vol. 75(C).
    13. Chen, Bin R. & Chiu, Y. Stephen, 2010. "Public-private partnerships: Task interdependence and contractibility," International Journal of Industrial Organization, Elsevier, vol. 28(6), pages 591-603, November.
    14. N.F. Cruz & R.C. Marques & A. Marra & C. Pozzi, 2014. "Local Mixed Companies: The Theory And Practice In An International Perspective," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 85(1), pages 1-9, March.
    15. Zheng Wang & John S. Heywood & Guangliang Ye, 2020. "Optimal mixed ownership: A contract view," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 28(1), pages 45-68, January.
    16. Baños-Pino, José F. & Boto-García, David & Zapico, Emma, 2021. "Persistence and dynamics in the efficiency of toll motorways: The Spanish case," Efficiency Series Papers 2021/03, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    17. Fay, Marianne & Martimort, David & Straub, Stéphane, 2021. "Funding and financing infrastructure: The joint-use of public and private finance," Journal of Development Economics, Elsevier, vol. 150(C).
    18. Jean-Etienne de Bettignies & Thomas W. Ross, 2010. "The Economics of Public–Private Partnerships: Some Theoretical Contributions," Chapters, in: Graeme A. Hodge & Carsten Greve & Anthony E. Boardman (ed.), International Handbook on Public–Private Partnerships, chapter 7, Edward Elgar Publishing.
    19. Mansaray, Alhassan & Coleman, Simeon & Ataullah, Ali & Sirichand, Kavita, 2021. "Residual government ownership in public-private partnership projects," Journal of Government and Economics, Elsevier, vol. 4(C).
    20. repec:tur:wpaper:9 is not listed on IDEAS
    21. Dildar Hussain & Josef Windsperger, 2013. "A property rights view of multi-unit franchising," European Journal of Law and Economics, Springer, vol. 35(2), pages 169-185, April.

    More about this item

    Keywords

    administrative reform; concession; publicly owned enterprises; public–private partnerships; public sewerage business;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rse:wpaper:v:24:y:2022:i:2:p:46-57. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Manuela Epure (email available below). General contact details of provider: https://edirc.repec.org/data/pgsaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.