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).
Anthony E. Boardman and Mark A. Moore
Anthony E. Boardman and Aidan R. Vining
One specific focus, central to Chapter 5 by Boardman and Vining, is on how to make an economic evaluation of social policy. The chapter provides an overview of the methods used to evaluate social policies, which focus on the criterion of allocative efficiency, including both comprehensive methods (cost–benefit analysis) and non-comprehensive economic evaluation methods. It also discusses some of the important issues associated with the economic evaluation of social policies, including some of the pitfalls.