Creation of favorable living conditions in cities becomes more complicated. Co-production of public services on the local level is naturally based on the involvement of communities, because they are interested in the quality of local public goods that municipal governments where historically authorized to produce. Local authorities practice the variety forms of citizens involvement in landscaping, construction and repairing infrastructure, social support for the needy, sick and elderly care, etc. Generally, communities that act as the participants of co-production are so-called neighborhood associations (NAs). They are some initiative groups of neighboring citizens and their followers who decide to improve living conditions in their districts. NAs are non-governmental organizations; their development depends on evolution of civil society on the territory and they have to be self-motivated.
Our research question is What forms of contracts should be used between municipal authorities and NAs in co-production on local public services?
Conceptual foundation for the research based on the studies about the nature of NAs. The first group of authors discusses neighborhood-level political participation of citizens in policy development (Sharp, 2012; Lloyd, 2014; Forrest, 2017). Another group of researches focus on the social capital of the NAs as a specific resource in co-production of local public services (Alaimo, 2010; Houwelingen, 2012; Rosso, 2014; Hur, 2015; Nah, 2016). Consequently, capability to increase the political activity of citizens and capability to attract additional resources are the main characteristics of the NAs that could be exploited in co-production of local public services.
To verify this hypothesis, we explore the activities of NAs based on content analyze of NAs web-sites in 50 largest Russian cities. We found that “Interaction with local self-government bodies” and “Informing the communities about news and events in the field of housing and communal services” were mentioned by almost 50% of surveyed cases.
On the next step based on the studies of contracting for collaborative services (Roels, 2010; Vinogradov, 2016), we applied these characteristics of the NAs as a focus of optimal contract between municipal authorities and NAs in co-production on local public services (that is modeled, for instance, by the Cobb-Duglass function). Following this logic, we concluded that three types of contracts could be used: a) subsidies for NAs that act as translators, b) project grants for NAs that act as co-producers and c) bonus grants for the “best-performers”.
We also analyze the current co-production practice of municipal authorities with the involvement of NAs in 70 largest Russian cities. All forms of contracts were investigated, and three main forms were distinguished (but can be applied simultaneously): a) subsidies for all NAs in the city (in 53% of the surveyed cities), b) project grants for social programs of NAs (in 44% of the cities), c) “the Best NAs” grants (in 36% of the cities). These results confirm the validity of our economic justification of co-production of local public services.
