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Public procurement versus laissez-faire: evidence from household waste collection

Meriläinen, Jaakko and Tukiainen, Janne (2019) Public procurement versus laissez-faire: evidence from household waste collection. CESifo Economic Studies, 65 (4). pp. 446-463. ISSN 1610-241X

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Identification Number: 10.1093/cesifo/ifz001


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.

Item Type: Article
Official URL:
Additional Information: © 2019 The Authors
Divisions: School of Public Policy
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Subjects: H Social Sciences > HC Economic History and Conditions
J Political Science > JS Local government Municipal government
JEL classification: C - Mathematical and Quantitative Methods > C2 - Econometric Methods: Single Equation Models; Single Variables > C23 - Models with Panel Data
D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Economic Models of Political Processes: Rent-Seeking, Elections, Legislatures, and Voting Behavior
H - Public Economics > H7 - State and Local Government; Intergovernmental Relations > H76 - State and Local Government: Infrastructures; Procurement; Public Safety; Penal Systems; Other Expenditure Categories
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets
L - Industrial Organization > L8 - Industry Studies: Services > L85 - Real Estate Services
Date Deposited: 06 Mar 2019 12:21
Last Modified: 16 May 2024 02:40

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