Local governments typically provide a variety of services including roads, primary and secondary education, bus and other public transportation services, fire prevention, garbage collection, parks, policing, social assistance, and water and wastewater treatment. Many of these services require physical facilities in order to operate. Much public infrastructure is old and needs to be replaced. In many regions, the capacity of the infrastructure needs to be expanded. The cost of providing new or refurbished infrastructure continues to increase and, at the same time, many voters oppose tax increases. In attempts to do more for less, local governments have explored alternative forms of service delivery. Many services have been contracted out to the private sector, most notably for garbage collection but also in other areas. More recently, local governments have formed hybrid organisations to provide local services. This chapter focuses on hybrid organisations in which a local government and the private sector are partners in the sense that each sector has property rights pertaining to the organisation. We refer to these organisations as local government mixed enterprises (local MEs).
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