Recently, many companies have been transferring the public owned companies into providing the sector with an aim to enhance their competitiveness. Municipal governments provide own various firms that provide services such as infrastructural, sewages and water services. The local governments have been privatizing these entities to enhance efficient delivery of services. Privatization involves transferring public enterprise into a private body. Most countries in Europe are divided into municipalities which are regional governments that provide various services to the public such as water and sewage services, energy supply and infrastructural developments. In recent, the local governments have been making major reforms in public sectors with an aim to improve the delivery of services. Through privatization, the firms can compete and produce cost-effective and quality services. In this paper, this paper investigates the relationship between privatization and the delivery of services in the municipalities based on the eight literature review.
Impact of The Service, Political and the Financial trends on the Municipal Choices Various Delivery Modes
The topic of privatization of municipal governments, the research topic addressed by Schoute, Bedding, & Gradus, the impact of the service, political and financial trends on the municipal choices of various delivery modes. The research distinguishes the services delivery modes that exist and the services provided by the municipality services. The study focuses on the political, governance, fiscal and social-economic factors to determine the features of the local government. Also, the study analyzes between the political preferences as shown by the members of the local government and the aldermen. It is hypothesized that when the metropolitan government puts more emphasis on the output and income indicator, it will contract services. This study applied the transaction cost theory to collect information from the municipal administrators. The data obey two characteristics which include; "asset specificity and the measurement difficulty" (Schoute, Bedding, & Gradus, 2018). The study used applied the multipurpose survey collect responses from the municipality officials and information regarding the political and social-economic characteristics from the primary sources. Also, the researchers collected information from the reports based on objectives and the performance indicators to measure the administration relationships. The results show that, it is evident for governance characteristic the possibility of a service to be performed within a local -owned firm is high when the local government creates more objectives.
Additionally, a possibility that service is conducted within the co-operation of the local governments increases when the municipality is concerned with the production capacity. Moreover, there is the likelihood that a firm will be privatized, when the local administrators are more concerned with the outcome, indicators and show less emphasis on output input and process markers. Based on the financial factor, the results indicated that the municipalities would benefit financially if they did not privatize the firm.
Cooperation among Municipalities
In the next topic, the research by Bel, Fageda, & Mur, (2013) aimed to understand why different municipalities cooperate to provide local public services from Spain's regional governments the focus of this study on cooperation of the municipalities in provision of the solid waste services as a tool for restructuring of the services in smaller metropolitan governments.
The article aims to understand if the local politicians choose to privatize could be influenced by the ideological criteria. Also, the authors of the article sought to understand if those who decided to cooperate were influenced by the ideological standard.
The study used the theory of scale of economies which is achievable by reducing the transaction costs and limiting the chances of completion. This theory is applicable when there is collaboration among small municipalities in the provision of solid waste materials.
The empirical model helped which included the variable that determined the privatization or cooperation the delivery of the waste services in Aragon. The statistics used in the empirical evaluation were sourced from the Aragonese municipalities which contained more than 84% of the overall county governments and the sample covered almost 98% of the whole municipalities. It is hypothesized that the reformist prefers greater public production while the right wing opt for private production. If the municipalities base the contracting decisions on ideological factors the hypothesis test positive. The other hypothesis is that if the ideological standards of the metropolitan authorities influence the decision to cooperate, the hypothesis would provide a significant coefficient.
From the analysis of the information, it is clear that the decision to privatize is dependent on the size of the metropolitan. Larger and mid-sized municipalities will opt for privatization decision to facilitate the efficiency of service delivery. The smaller local government will prefer to outsource the services from other municipalities.
Additionally, the decision to make collaborate or not relies on not only on the cost factor but also the conservative or the reform approach that the municipal administration adapts. Since the Aroganese uses the right wing approach, they prefer the privatization. From the analysis, it is clear that medium-sized municipalities will prefer to privatize their services while the small municipalities will need to cooperate with other municipalities to reduce the costs of providing the services. The dispersed local governments have limited funds and collaboration would limit their expenses. Additionally, the small administrations have limited personnel for supervision. Therefore, they are unable to provide high-quality services. Additionally, the small municipals have little concerns about competition.
Substitute Models of Service Delivery in Small and Rural Local Governments
The research by Mohr, Deller, & Halstead, (2010) investigated the substitute models of service delivery in small and rural local governments. The article uses a range of choices that the small municipalities and those are in the suburbs have. Unlike other studies that focus on specific services, the study considers 59 functions of the municipalities.
The study used a survey of data of three states which have almost 1000 local government. Most of them selected are from the rural area which less than 1000 population. The research used the cross-section model to determine the relationship between the metropolitan trends and the plans for the future privatization. Also, the study applied the correlation between trends and service production at the local government level. The research uses the primary data from the mentioned three municipalities; New Hamshire, Illinois, and Wisconsin. The study mainly focuses on the 82 services provided in the three regions and the level of satisfaction from each service. The survey includes the questions on the function of the administration in providing the services and the experiences from privatized services and those provided through the contracts.
The results indicate that in areas highly developed areas, there are possibilities of the plan to adapt to the privatization. In the rural areas, the chances to prefer the privatization of services are low due high costs involved and the financial constraints. Therefore, the undeveloped regions will choose not to make privatization contracts. Additionally, the results also show that there is no relationship between the control variables and the level of satisfaction. , the researchers used the Likert scale so that the respondents could indicate their level of satisfaction.
This research concludes that small municipalities faced challenges when they were making bids to contract the services. The small and rural municipalities can benefit from the by benefiting from the local governments if only they share the data. Additionally, multi-community contracts would enhance the competitive, and as a result, the number of bids will increase.
A pattern of Partnership and the Level of Satisfaction
The next topic involves Girard, Mohr, Deller, & Halstead, (2009) aimed to identify the pattern of partnership and the level of satisfaction as a result of those partnerships In Hampshire. The focus of the study examines the patterns of all forms of partnership with private companies, no-profit organizations, and other government agencies.
The study uses the quantitative and qualitative data based on the public-private partnership in the provision of public services by municipalities in the suburbs of New Hampshire. The descriptive results explore how the model of public-private collaborations and levels of contentment. The analytic information aims to show how the factors such as fiscal health, the location, and the voting decisions relate to the privatization of the decisions and the amount of satisfaction based on the recent level of output. The results of this research indicate that the financial stress and the location influence the provision of services. The statistical results are based on three strategies which include contracting with profit-making private entities, units of government and if there exist other forms of delivery of services apart from those provided by the staff.
The results indicate that the economic pressure ideology and the size are connected to the level of satisfaction as depicted in New Hampshire. Additionally, the results indicate that the nature of the services influences the level of contentment.
The study concludes that small towns have varied experiences with various models of collaborations varying from the contracting with profit-making private organizations to no profit-making corporate. The respondent showed their dissatisfaction with the level outsourced services. The New Hampshire local government had an insufficient number of bids because of there an insufficient number of organizations willing to bid for the contracts.
Contribution of Completion and Public Management Capacity in Privatization
The other topic involves the research by Van Slyke, (2003) contribution of completion and public management capacity in privatization. This article analyzed two questions, does social service exist in the in competitive business world? And, do governments have sufficient public management capacity to contract effectively to societal services.
The study relied on the views of agency, stewardship, and network theory. The agency and stewardship appropriate this study because they represent the different ends of the of the management range. The network model is applicable about network relationship.
The researchers administered the interviews with each taking about one and a half hours. The interview focused on three issues which include; the completion, public management capacity and the purpose for contracting. The interviews were recorded through tapes, writing and coded depending on the response.
The finding of this research, indicate that public management hinders the government's ability to enhance the competition and its ability to be a smart buyer. Additionally, if the government has a contract he services that the private sector is producing; it must have enough resources to enhance effective oversight and accountability. Moreover, according to Van Slyke (2003).
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