António F. Tavares

Local service delivery choices in Portugal: A political transaction costs framework

Abstract In recent years, Portugal has witnessed a large increase in municipal corporations to deliver public services. This article addresses the important question of why Portuguese municipalities choose municipal corporations to deliver certain services, while other services remain provided by in-house bureaucracies. We argue that political transaction costs in local service delivery, linked both to the characteristics of goods and services and to the political and financial features of the municipality, prevent or facilitate delivery by municipal corporations. Using data from 278 Portuguese local governments, multivariate probit models are employed to test hypotheses derived from this political transaction costs framework. Results support the idea that services involving the collection of user fees are more likely to be transferred to municipal corporations. The political and socio-economic context has to be considered in this decision-making process. Local officials ignoring this information are likely to create service delivery mechanisms that are economically inefficient and/or politically unresponsive.

Measuring Local Government Transparency

Abstract Despite the importance of government transparency to promote accountability and prevent maladministration, empirical research has failed to produce proper tools to assess and compare government transparency practices. Most contributions to the topic do not address it from a stakeholder’s perspective, particularly in selecting the indicators to include in transparency indexes. This paper contributes to the debate by developing a municipal transparency index based on information available on local government official websites. The methodological approach borrows insights from the decision analysis literature to structure the index through a participatory process. An application to the Portuguese local government setting is briefly discussed.

New Forms of Local Governance

Abstract This article seeks to identify which factors lead local governments to use corporate public sector organizations, particularly municipal corporations, for service delivery. The authors argue that local officials trade off bureaucratic costs of in-house production with agency costs of external delegation to municipal corporations when deciding how to deliver local public services. Econometric models are employed to test this explanation for the adoption of municipal corporations by 278 Portuguese local governments. The results indicate that organizational size, financial independency and fiscal surplus, as well as ideological concerns and the activity of local interest groups, drive choices of local governance structures.

So close, yet so far away? the effects of city size, density, and growth on local civic participation

ABSTRACT: Recent studies in the U.S. context have suggested that political participation is a function of the size and concentration of a city’s population. Most of this research focuses on the idea that there is an optimal size and concentration of population that favors active political participation in terms of a higher propensity to vote in local elections, contact local officials, and attend community meetings. The conventional argument suggests a negative relationship between city size and political participation that is mitigated to some extent by the deeper social interactions generated by increased population density. We extend this research by also investigating the influence of population growth on the broader concept of civic participation. Civic participation is a multidimensional concept that requires the use of a broad set of indicators. We expand the number of measures to gauge civic participation at the local level by including data on the formation of volunteer associations, volunteer fire brigades and not-for-profit organizations as well as voter turnout. We test the hypotheses derived from extant research using aggregate data collected from Portuguese cities and discuss the implications of our findings for the literature on local civic participation.

City Size and Political Participation in Local Government Reassessing the Contingent Effects of Residential Location Decisions Within Urban Regions

J. Eric Oliver’s finding that city size influences the political participation of residents has been challenged by studies suggesting that differences in population density within cities and how the population is distributed across cities within regions may moderate any negative effects of city size. We analyze these propositions of contingent effects by examining self-reported participation activities from a random sample of residents from the state of Michigan in the summer of 2005. Our findings confirm the importance of the conditional effects of population density on the relationship between city size and political participation. The support provided by our analysis for the other contingent factors is more mixed.

The economic and political impacts of top-down territorial reforms: the case of sub-city governments

Abstract The main objective of this manuscript is to test two competing hypotheses from the regionalism/localism literature regarding local government size. The Leviathan hypothesis argues that fragmentation induces lower spending through more decentralised government structures which are smaller relative to the size of the local economy. This argument is in sharp opposition with the supporters of regionalism who argue that territorial centralisation can produce economies of scale and significant cost savings, reduce overlaps and promote a more efficient local government. These competing hypotheses derived from the literature are tested using data collected from all 278 local governments of continental Portugal. We measure local government size as both per capita total expenditures and per capita grant transfers to sub-city governments and territorial fragmentation as the number of sub-city governments per 1,000 individuals. Our findings indicate that higher levels of sub-city fragmentation lead to increased municipal government spending and transfers to sub-city governments, thus suggesting that the amalgamation of sub-city governments required by the Memorandum of Understanding (MoU) signed in 2011 by the Portuguese government, the International Monetary Fund, the European Union and the European Central Bank and mandated by national legislation has the potential to induce cost savings and to improve financial sustainability.

Ten years after: revisiting the determinants of the adoption of municipal corporations for local service delivery

ABSTRACT Research on the use of municipal corporations to deliver local and regional public services has evolved significantly in the past decade. Most of this work addresses the performance of this service-delivery mode in relation to local bureaucracies. However, much less is known about the drivers for the adoption of municipal corporations in the first place. This article reviews the main determinants of adoption – service characteristics, institutional and regulatory settings, political constraints and financial conditions – and highlights the need for comparative research across countries.

The same deep water as you? The impact of alternative governance arrangements of water service delivery on efficiency

This work contributes to the literature on water governance by attempting to provide an answer to the question of what are the differences in efficiency of alternative governance arrangements of water utilities. We test hypotheses derived from property rights, principal–agent, and transaction costs theories using a comprehensive database of 260 water utility systems provided by the Portuguese Regulatory Authority of Water and Waste Services. Using endogenous switching regression models estimated through maximum likelihood, the study is designed in two steps. First, we investigate differences in efficiency between in-house options and externalization and find that in-house solutions as a set (direct provision and municipal companies) are more efficient than externalization options (mixed companies and concessions). Second, we test differences in efficiency within both in-house and externalization solutions, and fail to find statistically significant differences in efficiency between in-house bureaucracies and municipal companies and between mixed companies and concessions.

Inter-municipal Cooperation and Austerity Policies: Obstacles or Opportunities?

The profound challenges experienced by European countries as a consequence of the fiscal crisis, combined with the increase in the scope, size, and diversity of inter-municipal cooperation (IMC), justify a closer look at whether and how austerity policies have shaped the developments of IMC across different countries. Has IMC become more prevalent in countries affected by the fiscal crisis? Have austerity policies presented obstacles or opportunities for IMC initiatives? We conducted a survey of experts in 11 selected countries, including both countries that were hit hard by the fiscal crisis and implemented extensive austerity policies and countries where IMC is known to be or becoming prevalent. The results of this exploratory analysis indicate that in five of the countries included in our sample (Italy, Portugal, Iceland, the Netherlands, and the UK), IMC has emerged as a solution to deal better with fiscal stress.

Municipal amalgamations and their effects: a literature review

Abstract Municipal amalgamation reforms have been advocated as ways to improve efficiency, reduce costs, and enhance capacity in local government service provision. Research on the consequences of amalgamations has reached maturity in terms of theories, research designs and methods, justifying a systematic survey of results. This article provides a synthesis of the empirical literature published over the last 20 years, organizing the effects of amalgamations into three categories: economic efficiency and cost savings, managerial implications, and democratic outcomes. Despite the significant variation across countries and reforms, some regularities emerge: cost savings being primarily limited to general administration expenditures (wages, office supplies, and so on), few changes in the quality of local services, and the diminished quality of local democracy. Several studies point to amalgamation reforms experiencing a trade-off between efficiency and democracy.