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Public Procurement versus Laissez-Faire: Evidence from Household Waste Collection

Jaakko Meriläinen () and Janne Tukiainen ()

No 113, Working Papers from VATT Institute for Economic Research

Abstract: We document that switching from laissez-faire production to public procurement in residential waste collection in Finland reduces the number of firms active in the local market, but induces a statistically significant and large decrease in unit prices on average. While public procurement, thus, seems to be desirable from the citizens’ perspective, not all municipalities adopt public procurement. We provide descriptive evidence that municipal council composition is associated with the chosen regime. This suggests that local politics may be one obstacle for the efficient provision of local public goods.

Keywords: free markets; waste collection; public procurement; Local public finance and provision of public services; C23; D72; H76; L13; L85 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ure
Date: 2018
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