Resilient managed competition during pandemics: lessons from the Italian experience.

One of the main governance decisions that policymakers need to make is whether to implement public services via centralized or decentralized forms. As Costa et al. discuss in their article, when public services are implemented via competing systems, service providers contend to provide good services with the ultimate objective of gaining market quota. This is known as managed competition (MC), as the authorities will have to manage the panoply of public and private organizations offering the service. The alternative is to manage the service more centrally, in what it is identified as vertical integration. As the authors describe, several governments around the globe have abandoned their vertical integrated models in favour of decentralized models. This is the case, as the authors recall, for most health services in Europe. While there is an emerging body of evidence suggesting that decentralized MC outperforms vertically integrated models both in terms of efficiency and in terms of service quality, little is known on how these systems react under different circumstances. This means, for example, how these systems can cope with a sudden increase in their service demands.

The Effect of Health and Economic Costs on Governments' Policy Responses to COVID-19 Crisis under Incomplete Information.

The COVID-19 pandemic has become an unprecedented health, economic, and social crisis. The present study has built a theoretical model and used it to develop an empirical strategy, analyzing the drivers of policy-response agility during the outbreak. Our empirical results show that national policy responses were delayed, both by government expectations of the healthcare system capacity and by expectations that any hard measures used to manage the crisis would entail severe economic costs. With decision-making based on incomplete information, the agility of national policy responses increased as knowledge increased and uncertainty decreased in relation to the epidemic's evolution and the policy responses of other countries.

Watch your neighbor: Strategic competition in waste collection and service quality.

Public procurement is frequently used to contract solid waste collection services. Incomplete contracts and transaction costs increase the need for monitoring and supervision. In such cases, competition by comparison can be a useful tool. In Barcelona, solid waste collection is regulated by competition, with four delivery zones being contracted out separately. Therefore, it is possible to make relative performance assessments, especially in the areas where the contracted firms operate close to each other. Private firms anticipate stronger competitive pressures near to competitors' zones, even after the contract has been awarded, and they compete on quality. This research studies the influence of the proximity between competitors on the quality of service delivery. Monthly data on the number of complaints regarding waste collection in the city's 73 neighborhoods between 2014 and 2019 is used to evaluate quality. Using count model approaches, our results show that higher quality is provided in neighborhoods closer to other neighborhoods served by a competing firm. Moreover, lower quality is delivered in peripheral neighborhoods, where comparison with competitors' neighborhoods is much harder, if at all possible. The results are consistent with the hypothesis that firms strategically manage quality performance and tend to deliver higher quality where they anticipate that monitoring by the regulator is easier. The findings add to the existing knowledge of competition as a regulatory tool used to obtain more information and providing useful insights to policymakers and regulators to better understand firms' behavior in quality delivery.

Introducing and enhancing competition to improve delivery of local services of solid waste collection.

Over the last two decades, Barcelona has implemented a far-reaching reform of the city's solid waste collection. In 2000, the city was divided in four zones, with four separate solid waste collection contracts being awarded to private firms, with none being allowed to obtain more than two zones, a rule that was revised in 2009 to just one contract per firm. This division of the market via exclusive territories sought to enhance competition in the expectation of the convergence of relative costs, efficiency and service quality throughout the city. This study analyzes and evaluates the creation of lots as a tool of competition with monthly observations of costs and outputs between 2015 and 2019. Main findings are that firms producing in larger zones report higher costs, that increased competition was not sufficient to lead to converging costs, and that none of the firms operate under increasing returns to scale. Based on our results, we recommend creating an additional zone. We further suggest that if a public firm managed one of the zones, the regulator would obtain more reliable information on the service costs and technical characteristics, thus increasing her capabilities as supervisor of the private firms delivering the service in other zones.

Similar problems, different solutions: comparing refuse collection in the Netherlands and Spain.

Because of differences in institutional arrangements, public service markets, and national traditions regarding government intervention, local public service provision can vary greatly. In this paper we compare the procedures adopted by the local governments of The Netherlands and Spain in arranging for the provision of solid waste collection. We find that Spain faces a problem of consolidation, opting more frequently to implement policies of privatization and cooperation, at the expense of competition. By contrast, The Netherlands, which has larger municipalities on average, resorts somewhat less to privatization and cooperation, and more to competition. Both options-cooperation and competition-have their merits when striving to strike a balance between transaction costs and scale economies. The choices made in organizational reform seem to be related to several factors, among which the nature of the political system and the size of municipalities appear to be relevant.

Intermunicipal cooperation, privatization and waste management costs: evidence from rural municipalities.

The aim of this paper is to analyze the effects of intermunicipal cooperation and privatization on the delivery costs of urban solid waste services in rural environments. The results of our empirical analysis, which we conducted among a sample of very small municipalities, indicate that small towns that cooperate incur lower costs for their waste collection service. Cooperation also raises collection frequency and improves the quality of the service in small towns. By contrast, the form of production, whether it is public or private, does not result in systematic differences in costs. Interestingly, the degree of population dispersion, that is, the number of population units within the municipal jurisdiction, has a significant positive relation with service costs. No evidence of scale economies is found because small municipalities have likely exploited them by means of intermunicipal cooperation.