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Shifts in local governments’ corporatization intensity: Evidence from German cities

  • Why do local governments create and reform public service companies, given their uncertain economic benefits and potential damage to accountability and service transparency? Taking an extended transaction cost perspective, we argue that corporatization—the provision of public services by publicly owned companies—is a function of fiscal hardship, the decision maker’s economic orientation and the level of operator transparency. Using a two-way fixed effects regression, we test this expectation on 680 investment reports of 34 German cities from 1998 to 2017, representing 11,062 year-corporatized entity combinations. We show that the drivers of corporatization are sensitive to the depth of local ownership analyzed. In doing so, we highlight the theoretical need and potential for conceptual differentiation between ownership levels along a corporation’s lineage. Exploiting the data’s panel structure, we also find that the intensity of corporatization has heightened since the late 1990s, largely due to increasingly complex corporate structures of indirect ownership.

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Metadaten
Document Type:Article
Language:English
Author(s):Maike Rackwitz, Christian Raffer
Parent Title (English):Journal of Public Administration Research and Theory
Publication year:2024
Publishing Institution:Hertie School
DOI:https://doi.org/10.1093/jopart/muae001
Release Date:2024/02/08
Article Number:muae001
Hertie School Research:Centre for Digital Governance
Licence of document (German):Metadaten / metadata
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