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WHY DO LOCAL GOVERNMENTS PRIVATIZE THE PROVISION OF WATER SERVICES? EMPIRICAL EVIDENCE FROM SPAIN
Author(s) -
GONZÁLEZGÓMEZ FRANCISCO,
PICAZOTADEO ANDRÉS J.,
GUARDIOLA JORGE
Publication year - 2011
Publication title -
public administration
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.313
H-Index - 93
eISSN - 1467-9299
pISSN - 0033-3298
DOI - 10.1111/j.1467-9299.2010.01880.x
Subject(s) - water industry , business , empirical evidence , value (mathematics) , public economics , service (business) , water sector , economics , water supply , marketing , philosophy , epistemology , machine learning , environmental engineering , computer science , engineering
Why do some local governments privatize water services, while others opt for public management? Economic literature has been unable to demonstrate that private management is more efficient than public management, so there must be other reasons that lead governments to privatize the service. But what are they? This paper presents the results of a study that analyses the factors behind the privatization of water services with data from 741 municipalities located in the South of Spain over a period dating from 1985 to 2006. A discrete choice model analyses the influence of each factor on the likelihood of privatization. One of the novelties of this paper is that we take the value of the explanatory variables at the time when water services are privatized. Among our findings, it is worth highlighting the importance of the size of municipalities, their financial burden and the neighbouring effect.