Privatization and intermunicipal contracting: the US local government experience 1992-2007

Local government scholars are giving increasing attention to market solutions to urban service delivery. Intermunicipal contracting and privatization are two market approaches to reaching economies of scale. Using national data on over one thousand municipalities from across the United States for the 1992-2007 period, we explore the differences between intermunicipal contracting and privatization and assess how the use of these market approaches relates to efficiency, scale, and public engagement factors. Using probit models for each of four survey years (1992, 1997, 2002, 2007), we find these market solutions are only partial responses to the problem of regional coordination and exhibit important differences with respect to place, management, and political concerns. These market solutions exhibit limited efficiency, equity, and voice benefits.