REFUSE COLLECTION SERVICES EFFICIENCY: COMPETITION, CO-OPERATION OR HYBRIDIZATION?

Competitive environment together with the form of provision of public utilities belong among one of the first factors studied with respect to cost efficiency. In the Czech Republic many inter-municipal enterprises are also... [ view full abstract ]

Competitive environment together with the form of provision of public utilities belong among one of the first factors studied with respect to cost efficiency. In the Czech Republic many inter-municipal enterprises are also hybrids. This paper studies the relation between costs of local public utilities and competition, co-operation and hybridization in OLS regression model where dependent variable is municipal refuse collection expenditure per capita.
Our RQ is: Are competition, co-operation and hybridization consistent (in terms of synergic effect) or do they collide in relation to cost efficiency of local refuse collection expenditure?
The objective of this paper is to assess how the competition, co-operation and hybridization influence the level of refuse collection expenditure of Czech municipalities. The assessment is based on the data from almost 2,000 Czech municipalities for 2014. The study is conducted on refuse collection, as it is the most suitable public utility due to available data.
Simões and Marques (2012) in their complex review study draw attention to the fact that competition is one of the significant factors influencing cost efficiency of refuse collection services. Although from the point of view of theoretical concepts of competition, it can be expected that higher competition will have a positive impact on cost efficiency of municipal refuse collection expenditure, recent empirical evidence on cost savings from the competition on waste collection market is increasingly ambiguous. Majority of authors (cf. Savas 1977; Stevens 1978; Bel et al. 2013) observe that a higher level of competition influences cost efficiency, leading to decreasing of refuse collection expenditure, while other authors (Dijkgraaf and Gradus 2007; Bel and Warner 2008) come to an opposing conclusion.
Further intensive research has recently been focused on inter-municipal co-operation (Bel and Mur 2009 or Bel and Warner 2014). In the field of refuse collection services most of the authors (Bel and Fageda 2006; Bel and Warner 2014 Gradus et al. 2016) keep in mind reducing the refuse collection costs. However, Sørensen (2007) based on Norwegian data states that the inter-municipal co-operation increases the refuse collection costs.
Furthermore, the paper focuses on hybridity, as it is of both theoretical relevance and practical importance around the world (Billis 2010; Dees and Anderson 2003; Laville and Nyssens 2001). Impact of the hybrid (mixed) form of refuse collection enterprises is examined in a number of recent studies (cf. Warner and Hefetz 2012; Gradus et al. 2014; Gradus et al. 2016). In the wake of New Public Management (NPM), it has become common for public utilities to be performed by organizations operating at the intersection of the market and public sectors (Grossi and Thomasson 2015). By measuring the influence of hybridity on utility providers, it would be possible to assess the impact of the mixed enterprises collaboration on cost efficiency.
The public utilities efficiency, competition, intermunicipal co-operation and hybridization are currently discussed issues in up-to-date empirical and theoretical studies, while the topic of competition and co-operation belongs also to the selected panels of IRSM 2017 conference.