The Shadow of Managed Competition: Lessons From The MSW Managerial Reform In Indianapolis

Indianapolis has recently gone through an innovation in municipal solid waste management, known as managed competition which opened the trash collection to competitive bidding by both public and private service providers. This study asks whether this competitive approach reflects true innovation. This paper argues that there are problems associated with the managed competition system. Findings include: i) The enormous success may not be as large as it seems due to the measurement errors; ii) The process was not based on the strict bidding system but on the Request for Proposals; iii) Large numbers of city employees had to be laid-off; and iv) There are other associated problems such as vendor noncompliance and conflict between contractors. The analysis suggests that although the managed competition arrangements may appear very successful, the approach is in fact, a new way of dealing with the issue with different set of problems.