The cost efficiency of water utilities: when does public ownership matter?. Issue 6 (1st November 2016)

• Record Type: Journal Article
• Authors: Pazzi, Silvia; Tortosa-Ausina, Emili; Duygun, Meryem; Zambelli, Simona
• Is Part Of: Local government studies. Volume 42:Issue 6(2016)
• Page Start: 980
• Page End: 1003
• Publication Date: 2016-11-01
• Subjects: Efficiency -- geographical location -- ownership -- size -- water utilities; Local government -- Great Britain -- Periodicals; Local government -- Periodicals; 352.042
• DOI: 10.1080/03003930.2016.1207630
• Languages: English
• ISSNs: 0300-3930

Abstract

ABSTRACT: This study explores the impact of different ownership types on the efficiency of water utilities. Theories and evidence have shown a puzzling relationship between ownership and performance. Moreover, relatively recent contributions (Andrews et al. 2011) have argued that this relationship can be further convoluted by the effect of organisational and environmental variables. The current study aims to contribute to this literature by providing some empirical evidence for Italy, by proposing a methodology that combines non-parametric efficiency estimation and cluster analysis. Our main findings indicate that privately owned utilities indirectly controlled by a public organisation reach the highest level of efficiency but, when size and geographical location enter the analysis, ownership has a stronger significant effect on efficiency, and mixed utilities gain higher cost efficiency. Therefore, we may conclude that administrative reforms about privatisation and the institutional setting should consider a set of variables that characterise each individual organisation.