IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/22486.html
   My bibliography  Save this paper

La funzione economica del contratto di servizio nella trasformazione in spa delle aziende di servizi pubblici locali
[The economic function of the contract for local utilities]

Author

Listed:
  • Termini, Valeria
  • Cella, Michela

Abstract

This paper raises a neglecteed point in the literature on local public services, showing that even "formal privatizaion" (the transformation of the service provider into a joint-stock company) has a significant influence on the agents involved. The relationship between local government and the firm is examined in different scenarios using the formal tools of contract theory. The article shows how the service contract, introduced after formal privatization, changes the incentives and the productive efficiency of the firm. This contract is a flexible instrument which permits optimal tradeoffs between conflicting objectives: the local government's interest in maximizing revenues and the quality of local services in the short run and the profit maximization objective of the more independent and market oriented firm. The paper also provides a historical and normative overview of the evolution of local public utilities, which offers empirical support for the theoretical results.

Suggested Citation

  • Termini, Valeria & Cella, Michela, 1999. "La funzione economica del contratto di servizio nella trasformazione in spa delle aziende di servizi pubblici locali [The economic function of the contract for local utilities]," MPRA Paper 22486, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:22486
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/22486/1/MPRA_paper_22486.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Schmidt, Klaus M, 1996. "The Costs and Benefits of Privatization: An Incomplete Contracts Approach," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 12(1), pages 1-24, April.
    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. Carlo Cambini & Yossi Spiegel, 2016. "Investment and Capital Structure of Partially Private Regulated Firms," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 25(2), pages 487-515, April.
    2. Patrick W. Schmitz, 2006. "Information Gathering, Transaction Costs, and the Property Rights Approach," American Economic Review, American Economic Association, vol. 96(1), pages 422-434, March.
    3. repec:eee:labchp:v:3:y:1999:i:pc:p:3573-3630 is not listed on IDEAS
    4. 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.
    5. Georg Gebhardt, 2000. "Innovation and Venture Capital," Econometric Society World Congress 2000 Contributed Papers 1404, Econometric Society.
    6. Megginson, William Leon, 2005. "The Financial Economics of Privatization," OUP Catalogue, Oxford University Press, number 9780195150629.
    7. Süssmuth Bernd & von Weizsäcker Robert K., 2011. "Shooting Rampages and Maintenance of Campus Safety: An Incomplete Contracts Perspective," Review of Law & Economics, De Gruyter, vol. 7(2), pages 573-600, December.
    8. 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.
    9. Stephen King & Rohan Pitchford, 2008. "Private or Public? Towards a Taxonomy of Optimal Ownership and Management Regimes," The Economic Record, The Economic Society of Australia, vol. 84(266), pages 366-377, September.
    10. Mikael Priks, 2005. "Optimal Rent Extraction in Pre-Industrial England and France – Default Risk and Monitoring Costs," CESifo Working Paper Series 1464, CESifo.
    11. Boudreaux, Christopher, 2019. "Do private enterprises outperform state enterprises in an emerging market? The importance of institutional context in entrepreneurship," MPRA Paper 93039, University Library of Munich, Germany.
    12. Mathias Dewatripont & Patrick Legros, 2005. "Public-private partnerships: contract design and risk transfer," ULB Institutional Repository 2013/175947, ULB -- Universite Libre de Bruxelles.
    13. Fehr, Ernst & Powell, Michael & Wilkening, Tom, 2021. "Behavioral Constraints on the Design of Subgame-Perfect Implementation Mechanisms," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 111(4), pages 1055-1091.
    14. Alberto Cavaliere & Simona Scabrosetti, 2008. "Privatization And Efficiency: From Principals And Agents To Political Economy," Journal of Economic Surveys, Wiley Blackwell, vol. 22(4), pages 685-710, September.
    15. Dyck, I. J. Alexander & Wruck, Karen Hopper, 1998. "Organization structure, contract design and government ownership: A clinical analysis of German privatization1," Journal of Corporate Finance, Elsevier, vol. 4(3), pages 265-299, September.
    16. Holger MAHLENKAMP, 2015. "From State To Market Revisited: A Reassessment Of The Empirical Evidence On The Efficiency Of Public (And Privately-Owned) Enterprises," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 86(4), pages 535-557, December.
    17. Christopher Boudreaux, 2019. "When does privatization spur entrepreneurial performance? The moderating effect of institutional quality in an emerging market," Papers 1901.03356, arXiv.org.
    18. Patrick W. Schmitz, 2001. "Partial Privatization and Incomplete Contracts: The Proper Scope of Government Reconsidered," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 57(4), pages 394-411, August.
    19. Berthold, Norbert & Fricke, Holger, 2007. "China's Booming Economy: Does the Federal Order Foster Growth?," Discussion Paper Series 95, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    20. Langholz, Jeffrey A. & Lassoie, James P. & Lee, David & Chapman, Duane, 2000. "Economic considerations of privately owned parks," Ecological Economics, Elsevier, vol. 33(2), pages 173-183, May.
    21. Robert Gibbons & John Roberts, 2012. "The Handbook of Organizational Economics," Economics Books, Princeton University Press, edition 1, volume 1, number 9889.

    More about this item

    Keywords

    contract theory; local utilities; privatization of public service utilities;
    All these keywords.

    JEL classification:

    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • L97 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Utilities: General
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

    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:pra:mprapa:22486. 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: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.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.