Giuseppe Bognetti

The Provision of Local Public Services Through Mixed Enterprises: The Italian Case

The rules regulating the creation of mixed enterprises companies (public-private companies) for the provision of local public services have been subjected, in Italy, to a rather complex evolution over time. The new rules introduced allow the creation of a mixed private public enterprise, with either public or private majority; in any case the private shareholder must be selected through a public tender procedure. The data seems to show that mixed enterprises have been used by municipalities as a tool that allows the exploitation of economies of scale and of scope, without necessarily losing control of the leadership and direction of the local utility. Better flexibility of mixed enterprises is also shown by the proportion of mixed enterprises acting outside the territory which is higher than the proportion of public enterprises similarly engaged. Moreover the presence of multi-service units is proportionally higher in mixed enterprises. Copyright 2007 The Authors Journal compilation

Liberalization and Privatization of Public Utilities: Origins of the Debate, Current Issues and Challenges for the Future

Theoretical arguments and empirical findings put forward in this paper leads to the conclusion, that the often stated dominant position against public enterprises is not at all convincing. In order to arrive at a fair and valid evaluation of public utilities, it is indispensable to look more closely to the particular circumstances of the technological, economic and social environment and the goals of the provision of a concrete service of public interest. The second part of the paper provides an overview of the scientific work of CIRIEC related to issues of public enterprises and services of general interest. It refers primarily to relevant research activities done in the International Scientific Commission Public services/Public enterprises. Over the past two decades CIRIEC contributed some recognized theoretical and empirical studies dealing with the functioning, governance and reform of public enterprises, based on an international perspective. Public utilities, public enterprises, privatizations, liberalizations and related topics have been the object of far reaching and intense debate among economists, politicians and practitioners for more than a century. Ideas have frequently changed, and practical solutions chosen to manage public utilities have also undergone significant changes over time. Presently we are witnessing a renewed debate on the relative opportunity of public and private enterprise. In the last twenty years privatization and liberalization have dominated the field. The outcome of this process has produced mixed results. Merits and demerits of privatization, liberalization and regulation are reviewed and discussed in the first part of the paper. The second part of the paper provides an overview of the scientific work of CIRIEC related to issues of public enterprises and services of general interest. It refers primarily to relevant research activities done in the International Scientific Commission Public services/Public enterprises. Over the past two decades CIRIEC contributed some recognized theoretical and empirical studies dealing with the functioning, governance and reform of public enterprises, based on an international perspective. Theoretical arguments and empirical findings put forward in this paper leads to the conclusion, that the often stated dominant position against public enterprises is not at all convincing. In order to arrive at a fair and valid evaluation of public utilities, it is indispensable to look more closely to the particular circumstances of the technological, economic and social environment and the goals of the provision of a concrete service of public interest.

The Reform of Local Public Utilities in Italy

The Italian system of local public utilities has recently undergone an important reform process. The first round of reforms, introduced in the 1990s, represented a remarkable change in the social welfare function with regard to the management of local public utilities. The legislation was specifically designed to cut costs and reduce deficits. A second round of reforms, required by European directives, started around the mid-1990s. Several laws were passed introducing important innovations and regulating specific sectors: public transport; electricity; and gas. Article 35 of the 2002 Financial Law was the final step in a comprehensive reform of the whole local public utility sector. The main innovations of the Financial Law concerns liberalization. Article 35 states that the general rule for awarding service provision contracts is competitive tendering; the rationale is obviously that of competition for the market. The general rule as expressed by Article 35 is nevertheless limited during the transition period. In the long run, competitive tendering will become the normal way of awarding contracts for local public utility provision. Even if there are doubts that full competition will be introduced into the sector, liberalization does appear to be having an effect, forcing many local public utilities to become more efficient. The changes introduced have brought about a better and a more efficient system with a greater number of large size enterprises and on the average a more active management. Copyright 2003 CIRIEC.

Local Public Services in European Countries: Main Results of a Research Project by CIRIEC International

The present article is meant as an introduction to the three contributions on local public transport, water services and waste management resulting from a research of CIRIEC International Scientific Commission on ‘Public Services/Public Enterprises’, launched in 2008. The main purpose of the research was to produce a cross section description of essential and widely used local public services in different countries and to investigate their evolution over the last two or three decades. We give here a transversal overview of general common trends in the three analyzed sectors. We explain the increasing autonomy and separation of decision levels in planning and governance processes, describe the changing role and nature of the provider of public services, depict some peculiarities of the structure and the process of regulation, and deal finally with some remarks on funding policies. We show that unquestionably EU directives and regulations did have a definite impact on the way the services were supplied; however this has not produced a prevailing ‘European model’ in all member States. Our research shows clearly that as of now the EU area offers very different models of local public services. The variety of solutions adopted is impressive. Each concrete choice regarding regulation, market governance, planning and provision depends in the end on a negotiation between the central state, local authorities, bureaucracy, trade unions, pressure groups such as private enterprises and users of the service. The existence of different solutions adopted by different countries and within the same sector could mean that a compulsory policy towards a uniform solution, as frequently favoured by the EU, is not convincing and should not be supported. Since there is no evidence that the different solutions produce different degrees of efficiency and effectiveness, they could represent appropriate forms of adaptation to national overall characteristics and changing citizens’ needs.